Increase (decrease) in calendar comparable sales(1)in the United States

1.6

%

(0.6

)%

(0.8

)%

3.5

%

1.6

%

Walmart U.S.

0.3

%

(1.5

)%

(0.7

)%

3.2

%

1.0

%

Sams Club

8.4

%

3.9

%

(1.4

)%

4.9

%

4.9

%

Gross profit margin

24.5

%

24.8

%

24.9

%

24.3

%

24.1

%

Operating, selling, general and administrative expenses, as a percentage of net sales

19.2

%

19.4

%

19.7

%

19.4

%

19.1

%

Operating income

$

26,558

$

25,542

$

24,002

$

22,767

$

21,916

Income from continuing operations attributable to Walmart

15,766

15,355

14,449

13,235

12,841

Net income per share of common stock:

Diluted net income per common share from continuing operations attributable to Walmart

$

4.54

$

4.18

$

3.73

$

3.35

$

3.15

Dividends declared per common share

1.46

1.21

1.09

0.95

0.88

Financial Position

Inventories

$

40,714

$

36,437

$

32,713

$

34,013

$

34,690

Property, equipment and capital lease assets, net

112,324

107,878

102,307

95,653

96,867

Total assets

193,406

180,782

170,407

163,096

163,200

Long-term debt, including obligations under capital leases

47,079

43,842

36,401

34,549

33,402

Total Walmart shareholders equity

71,315

68,542

70,468

64,969

64,311

Unit Counts

Walmart U.S. Segment

3,868

3,804

3,755

3,703

3,595

Walmart International Segment

5,651

4,557

4,099

3,595

3,093

Sams Club Segment

611

609

605

611

600

Total units

10,130

8,970

8,459

7,909

7,288

(1)

Comparable store and club sales include fuel. Fiscal 2008 comparable sales include all stores and clubs that were open for at least the previous 12
months; however, stores and clubs that were relocated, expanded or converted are excluded from comparable sales for the first 12 months following the relocation, expansion or conversion. Fiscal 2012, 2011, 2010 and 2009 comparable sales include
sales from stores and clubs open for the previous 12 months, including remodels, relocations and expansions, as well as online sales.

1

Table of Contents

Managements Discussion and Analysis of Financial Condition and Results of Operations

3

Consolidated Statements of Income

21

Consolidated Balance Sheets

22

Consolidated Statements of Shareholders Equity

23

Consolidated Statements of Comprehensive Income

24

Consolidated Statements of Cash Flows

25

Notes to Consolidated Financial Statements

26

Report of Independent Registered Public Accounting Firm

49

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

50

Managements Report to our Shareholders

51

Fiscal 2012 Unit Count

53

Board of Directors

55

Corporate and Stock Information

56

2

Wal-Mart Stores, Inc.

Managements Discussion and Analysis of

Financial Condition and Results of
Operations

Overview

Wal-Mart Stores, Inc. (Walmart, the Company or we) operates retail stores in various formats around the world and is
committed to saving people money so they can live better. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (EDLP), while fostering a culture that
rewards and embraces mutual respect, integrity and diversity. EDLP is our pricing philosophy under which we price items at a low price everyday so our customers trust that our prices will not change under frequent promotional activities. Our focus
for Sams Club is to provide exceptional value on brand name and private label merchandise at members only prices for both business and personal use. Internationally, we operate with similar philosophies.

Our fiscal year ends on January 31 for our United States (U.S.) and Canadian operations and on December 31 for all other
operations. We discuss how the results of our various operations are consolidated for financial reporting purposes in Note 1 in the Notes to Consolidated Financial Statements.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to
year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. We also discuss certain performance metrics that management uses to assess our performance. Additionally,
the discussion provides information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect the financial condition and results of operations of the Company
as a whole. This discussion should be read in conjunction with our Consolidated Financial Statements as of and for the fiscal year ended January 31, 2012, and accompanying notes.

Currently, our operations consist of three reportable business segments: the Walmart U.S. segment; the Walmart International segment; and the Sams Club segment. The Walmart U.S. segment includes the
Companys mass merchant concept in the U.S. operating under the Walmart or Wal-Mart brand, as well as walmart.com. The Walmart International segment consists of the Companys operations outside of the U.S. The
Sams Club segment includes the warehouse membership clubs in the U.S., as well as samsclub.com.

Throughout this Managements
Discussion and Analysis of Financial Condition and Results of Operations, we discuss segment operating income and comparable store and club sales. The Company measures the results of its segments using, among other measures, each segments
operating income, including certain corporate overhead allocations. From time to time, we revise the measurement of each segments operating income, including any corporate overhead allocations, as dictated by the information regularly reviewed
by our chief operating decision maker. When we do so, the prior period amounts for segment operating income are reclassified to conform to the current periods presentation. The amounts representing Other unallocated in the leverage
discussion of the Company Performance Metrics include unallocated corporate overhead and other items.

Comparable store and club sales is a
metric which indicates the performance of our existing U.S. stores and clubs by measuring the change in sales for such stores and clubs for a particular period from the corresponding period in the prior year. Walmarts definition of comparable
store and club sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations and expansions, as well as sales initiated online. Changes in format continue to be excluded from comparable store and club
sales when the conversion is accompanied by a relocation or expansion that results in a change in square feet of more than five percent. Comparable store and club sales are also referred to as same-store sales by others within the retail
industry. The method of calculating comparable store and club sales varies across the retail industry. As a result, our calculation of comparable store and club sales is not necessarily comparable to similarly titled measures reported by other
companies.

In discussing our operating results, we sometimes refer to the impact of changes in currency exchange rates that we use to convert
the operating results for all countries where the functional currency is not denominated in the U.S. dollar for financial reporting purposes. We calculate the effect of changes in currency exchange rates as the difference between current period
activity translated using the current periods currency exchange rates and the comparable prior periods currency exchange rates. We exclude the impact of current period acquisitions from our calculation. We refer to the results of this
calculation as currency translation fluctuations throughout our discussion. When we refer to constant currency operating results, we are referring to our operating results without the impact of the currency translation fluctuations and without the
impact of current period acquisitions. The disclosure of constant currency amounts or results, excluding the effect of acquisitions, permits investors to understand better our underlying performance without the effects of currency exchange rate
fluctuations or acquisitions.

We made certain reclassifications to prior fiscal year amounts or balances to conform to the presentation in
the current fiscal year. These reclassifications did not impact consolidated operating income or net income. Additionally, certain segment asset and expense allocations have been reclassified among segments in the current period.

3

The Retail Industry

We operate in the highly competitive retail industry in all of the countries we serve. We face strong sales competition from other discount, department, drug, dollar, variety and specialty stores,
warehouse clubs and supermarkets. Many of these competitors are national, regional or international chains, as well as internet-based retailers and catalog businesses. We compete with a number of companies for prime retail site locations, as well as
in attracting and retaining quality employees (whom we call associates). We, along with other retail companies, are influenced by a number of factors including, but not limited to: general economic conditions, cost of goods, consumer
disposable income, consumer debt levels and buying patterns, consumer credit availability, interest rates, customer preferences, unemployment, labor costs, inflation, deflation, currency exchange fluctuations, fuel and energy prices, weather
patterns, climate change, catastrophic events, competitive pressures and insurance costs. Further information on certain risks to our Company can be located in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year
ended January 31, 2012.

Company Performance Metrics

The Companys performance metrics emphasize three priorities for improving shareholder value: growth, leverage and returns. The Companys priority of growth focuses on sales through comparable
store and club sales and unit square feet growth; the priority of leverage encompasses the Companys objective to increase its operating income at a faster rate than the growth in net sales by growing its operating, selling, general and
administrative expenses (operating expenses) at a slower rate than the growth of its net sales; and the priority of returns focuses on how efficiently the Company employs its assets through return on investment (ROI) and how
effectively the Company manages working capital through free cash flow.

Growth

Net Sales

Fiscal Years Ended January 31,

2012

2011

2010

(Dollar amounts in millions)

Net Sales

Percentof Total

PercentChange

Net Sales

Percentof Total

PercentChange

Net Sales

Percentof Total

Walmart U.S.

$

264,186

59.5

%

1.5

%

$

260,261

62.1

%

0.1

%

$

259,919

64.2

%

Walmart International

125,873

28.4

%

15.2

%

109,232

26.1

%

12.1

%

97,407

24.0

%

Sams Club

53,795

12.1

%

8.8

%

49,459

11.8

%

3.5

%

47,806

11.8

%

Net Sales

$

443,854

100.0

%

5.9

%

$

418,952

100.0

%

3.4

%

$

405,132

100.0

%

Our consolidated net sales increased 5.9% and 3.4% in fiscal 2012 and 2011, respectively, compared to the previous fiscal
year. The increase in net sales for fiscal 2012 was attributable to a combination of an increase in comparable sales, growth in retail square feet and currency translation benefits, while the increase in net sales for fiscal 2011 was attributable to
growth in retail square feet and currency translation benefits, partially offset by a decline in comparable store and club sales. Acquisitions also contributed to the increase in net sales for fiscal 2012. Our continued expansion activities added
5.3% and 3.4% of additional retail square feet during fiscal 2012 and 2011, respectively. Currency translation benefits accounted for $4.0 billion and $4.5 billion of the increase in net sales for fiscal 2012 and 2011, respectively. The acquisitions
of Netto and Massmart completed in the second quarter of fiscal 2012, and further discussed in Note 14 in the Notes to Consolidated Financial Statements, accounted for $4.7 billion of the net sales increase in fiscal 2012. Volatility in
currency exchange rates may continue to impact the Companys net sales in the future.

Calendar Comparable Store and Club Sales

Comparable store and club sales is a measure which indicates the performance of our existing U.S. stores and clubs by measuring the growth
in sales for such stores and clubs for a particular period over the corresponding period in the previous fiscal year. The retail industry generally reports comparable store and club sales using the retail calendar (also known as the 4-5-4 calendar)
and, to be consistent with the retail industry, we provide comparable store and club sales using the retail calendar in our quarterly earnings releases. However, when we discuss our comparable store and club sales below, we are referring to our
calendar comparable store and club sales calculated using our fiscal calendar. As our fiscal calendar differs from the retail calendar, our calendar comparable store

4

and club sales also differ from the retail calendar comparable store and club sales provided in our quarterly earnings releases. Calendar comparable store and club sales for fiscal 2012, 2011 and
2010 are as follows:

With Fuel

Fuel Impact

Fiscal Years Ended January 31,

Fiscal Years Ended January 31,

2012

2011

2010

2012

2011

2010

Walmart U.S.

0.3

%

-1.5

%

-0.7

%

0.0

%

0.0

%

0.0

%

Sams Club

8.4

%

3.9

%

-1.4

%

3.4

%

2.0

%

-2.1

%

Total U.S.

1.6

%

-0.6

%

-0.8

%

0.6

%

0.4

%

-0.3

%

Comparable store and club sales in the U.S., including fuel, increased 1.6% in fiscal 2012 and decreased 0.6% and 0.8% in
fiscal 2011 and 2010, respectively. U.S. comparable store sales increased during fiscal 2012 primarily due to an increase in average ticket, partially offset by a decline in traffic. Comparable club sales were higher during fiscal 2012 due to a
larger member base driving increased traffic, as well as a broader assortment of items. Total U.S. comparable store and club sales decreased during fiscal 2011 primarily due to a decline in customer traffic. Although customer traffic increased in
fiscal 2010, comparable store and club sales in the U.S. were lower than those in the previous fiscal year due to deflation in certain merchandise categories and lower fuel prices.

As we continue to add new stores and clubs in the U.S., we do so with an understanding that additional stores and clubs may take sales away from existing units. We estimate the negative impact on
comparable store and club sales as a result of opening new stores and clubs was approximately 0.8% in fiscal 2012 and 2011 and 0.6% in fiscal 2010.

Leverage

Operating Income

Fiscal Years Ended January 31,

2012

2011

2010

(Dollar amounts in millions)

OperatingIncome

Percentof Total

PercentChange

OperatingIncome

Percentof Total

PercentChange

OperatingIncome

Percentof Total

Walmart U.S.

$

20,367

76.7

%

2.2

%

$

19,919

78.0

%

3.1

%

$

19,314

80.5

%

Walmart International

6,214

23.4

%

10.8

%

5,606

21.9

%

14.4

%

4,901

20.4

%

Sams Club

1,865

7.0

%

9.0

%

1,711

6.7

%

12.9

%

1,515

6.3

%

Other unallocated

(1,888

)

-7.1

%

11.5

%

(1,694

)

-6.6

%

-2.0

%

(1,728

)

-7.2

%

Total operating income

$

26,558

100.0

%

4.0

%

$

25,542

100.0

%

6.4

%

$

24,002

100.0

%

We believe comparing the growth of our operating expenses to the growth of our net sales and comparing the growth of our
operating income to the growth of our net sales are meaningful measures as they indicate how effectively we manage costs and leverage operating expenses. Our objective is to grow operating expenses at a slower rate than net sales and to grow
operating income at a faster rate than net sales. On occasion, we may make strategic growth investments that may, at times, cause our operating expenses to grow at a rate faster than net sales and that may grow our operating income at a slower rate
than net sales.

Operating Expenses

We leveraged operating expenses in fiscal 2012 and 2011. In fiscal 2012, our operating expenses increased 4.8% compared to fiscal 2011, while net sales increased 5.9% in fiscal 2012 compared to fiscal
2011. Operating expenses grew at a slower rate than net sales due to our continued focus on expense management. Our Global eCommerce initiatives contributed to the majority of the increase in operating expenses, as we continue to invest in our
e-commerce platforms. Depreciation expense increased year-over-year based on our financial system investments with the remainder of the increase being driven by multiple items, none of which were individually significant. In fiscal 2011, our
operating expenses increased 1.7% compared to fiscal 2010, while net sales increased 3.4% during fiscal 2011 compared to fiscal 2010. Operating expenses grew at a slower rate than net sales in fiscal 2011 due to improved labor productivity and
organizational changes made at the end of fiscal 2010 designed to strengthen and streamline our operations, as well as a reduction in certain incentive plan expenses.

Operating Income

As a result of the factors discussed above and our investment in price
for products sold in our retail operations, which reduced our gross margin, our operating income increased 4.0% and 6.4% in fiscal 2012 and 2011, respectively, while net sales increased 5.9% and 3.4% in fiscal 2012 and 2011, respectively.

5

Returns

Return on Investment

Management believes return on investment (ROI) is a
meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term potential strategic initiatives with any possible
short-term impacts. ROI was 18.6% and 19.2% for fiscal 2012 and 2011, respectively. The decrease in ROI in fiscal 2012 from fiscal 2011 was due primarily to additional investments in property, plant and equipment, Global eCommerce and higher
inventories, as well as price investment ahead of full realization of productivity improvements. In future periods, productivity gains are expected to align more closely with price investments. Additionally, to a lesser degree, ROI was positively
impacted by currency translation fluctuations, but offset by acquisitions.

We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for the fiscal year divided by average invested capital during that period. We consider average invested capital to be the average of our beginning and ending total assets of
continuing operations, plus average accumulated depreciation and average amortization, less average accounts payable and average accrued liabilities for that period, plus a rent factor equal to the rent for the fiscal year multiplied by a factor of
eight.

ROI is considered a non-GAAP financial measure. We consider return on assets (ROA) to be the financial measure computed in
accordance with generally accepted accounting principles (GAAP) that is the most directly comparable financial measure to ROI as we calculate that financial measure. ROI differs from ROA (which is income from continuing operations for
the fiscal year divided by average total assets of continuing operations for the period) because ROI: adjusts operating income to exclude certain expense items and adds interest income; adjusts total assets from continuing operations for the impact
of accumulated depreciation and amortization, accounts payable and accrued liabilities; and incorporates a factor of rent to arrive at total invested capital.

Although ROI is a standard financial metric, numerous methods exist for calculating a companys ROI. As a result, the method used by management to calculate ROI may differ from the methods other
companies use to calculate their ROI. We urge you to understand the methods used by other companies to calculate their ROI before comparing our ROI to that of such other companies.

6

The calculation of ROI, along with a reconciliation to the calculation of ROA, the most comparable GAAP
financial measurement, is as follows:

For the Fiscal Years EndedJanuary 31,

(Dollar amounts in millions)

2012

2011

CALCULATION OF RETURN ON INVESTMENT

Numerator

Operating income

$

26,558

$

25,542

+ Interest income

162

201

+ Depreciation and amortization

8,130

7,641

+ Rent

2,394

1,972

= Adjusted operating income

$

37,244

$

35,356

Denominator

Average total assets of continuing operations(1)

$

186,984

$

175,459

+ Average accumulated depreciation and amortization(1)

47,613

43,911

- Average accounts payable(1)

35,142

32,064

- Average accrued liabilities(1)

18,428

18,718

+ Rent x 8

19,152

15,776

= Average invested capital

$

200,179

$

184,364

Return on investment (ROI)

18.6

%

19.2

%

CALCULATION OF RETURN ON ASSETS

Numerator

Income from continuing operations

$

16,454

$

15,959

Denominator

Average total assets of continuing operations(1)

$

186,984

$

175,459

Return on assets (ROA)

8.8

%

9.1

%

As of January 31,

Certain Balance Sheet Data

2012

2011

2010

Total assets of continuing operations(2)

$

193,317

$

180,651

$

170,267

Accumulated depreciation and amortization

48,614

46,611

41,210

Accounts payable

36,608

33,676

30,451

Accrued liabilities

18,154

18,701

18,734

(1)

The average is based on the addition of the account balance at the end of the current period to the account balance at the end of the prior period and dividing by 2.

(2)

Total assets of continuing operations as of January 31, 2012, 2011 and 2010 in the table above exclude assets of discontinued operations that are reflected in the
Companys Consolidated Balance Sheets of $89 million, $131 million and $140 million, respectively.

Free Cash Flow

We define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that
period. We generated positive free cash flow of $10.7 billion, $10.9 billion and $14.1 billion for the fiscal years ended January 31, 2012, 2011 and 2010, respectively. The modest decline in free cash flow in fiscal 2012 compared to fiscal 2011
was primarily due to capital expenditures outpacing the growth in net cash generated from operating activities. The decrease in free cash flow during fiscal 2011 was primarily due to an increased investment in inventory after fiscal 2010 ended with
relatively low inventory levels, partially offset by increases in accounts payable.

Free cash flow is considered a non-GAAP financial
measure. Management believes, however, that free cash flow, which measures our ability to generate cash from our business operations, is an important financial measure for use in evaluating the Companys financial performance. Free cash flow
should be considered in addition to, rather than as a substitute for, income from continuing operations as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.

7

Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows
available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow
as a measure that provides supplemental information to our entire statement of cash flows.

Although other companies report their free cash
flow, numerous methods may exist for calculating a companys free cash flow. As a result, the method used by our management to calculate free cash flow may differ from the methods other companies use to calculate their free cash flow. We urge
you to understand the methods used by other companies to calculate their free cash flow before comparing our free cash flow to that of such other companies.

The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most
directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Net cash provided by operating activities

$

24,255

$

23,643

$

26,249

Payments for property and equipment

(13,510

)

(12,699

)

(12,184

)

Free cash flow

$

10,745

$

10,944

$

14,065

Net cash used in investing activities (1)

$

(16,609

)

$

(12,193

)

$

(11,620

)

Net cash used in financing activities

$

(8,458

)

$

(12,028

)

$

(14,191

)

(1)

Net cash used in investing activities includes payments for property and equipment, which is also included in our computation of free cash
flow.

Results of Operations

The following discussion of our results of operations is based on our continuing operations and excludes any results or discussion of our discontinued operations.

Consolidated Results of Operations

Fiscal Years
EndedJanuary 31,

(Amounts in millions, except unit counts)

2012

2011

2010

Net sales

$

443,854

$

418,952

$

405,132

Percentage change from previous fiscal year

5.9

%

3.4

%

1.0

%

Total U.S. calendar comparable store and club sales

1.6

%

(0.6

)%

(0.8

)%

Gross profit margin as a percentage of sales

24.5

%

24.8

%

24.9

%

Operating income

$

26,558

$

25,542

$

24,002

Operating income as a percentage of net sales

6.0

%

6.1

%

5.9

%

Income from continuing operations

$

16,454

$

15,959

$

14,962

Unit counts

10,130

8,970

8,459

Retail square feet

1,037

985

952

Our consolidated net sales increased 5.9% and 3.4% in fiscal 2012 and 2011, respectively, compared to the previous fiscal
year. The increase in net sales for fiscal 2012 was attributable to a combination of an increase in comparable sales, growth in retail square feet and currency translation benefits, while the increase in net sales for fiscal 2011 was attributable to
growth in retail square feet and currency translation benefits, partially offset by a decline in comparable store and club sales. Acquisitions also contributed to the increase in net sales for fiscal 2012. Our continued expansion activities,
including acquisitions, added 5.3% and 3.4% of additional retail square feet during fiscal 2012 and 2011, respectively. Currency translation benefits accounted for $4.0 billion and $4.5 billion of the increase in net sales for fiscal 2012 and 2011,
respectively. The acquisitions of Netto and Massmart completed in the second quarter of fiscal 2012, and further discussed in Note 14 in the Notes to Consolidated Financial Statements, accounted for $4.7 billion of the net sales increase
in fiscal 2012. Volatility in currency exchange rates may continue to impact the Companys net sales in the future.

8

Our gross profit, as a percentage of net sales (gross profit margin), declined 33 and 11 basis
points in fiscal 2012 and 2011, respectively, compared to the previous fiscal year. All three segments realized a decline in gross profit margin during fiscal 2012 based on our investment in price. Our Walmart U.S. segment and Walmart International
segment net sales yield higher gross profit margins than our Sams Club segment, which operates on lower margins as a membership club warehouse. In fiscal 2011, gross profit margin was relatively flat compared to fiscal 2010.

Operating expenses, as a percentage of net sales, were 19.2%, 19.4% and 19.7% for fiscal 2012, 2011 and 2010, respectively. In fiscal 2012, operating
expenses as a percentage of net sales decreased primarily due to our focus on expense management. In fiscal 2011, operating expenses as a percentage of net sales decreased primarily due to improved labor productivity and organizational changes
implemented at the end of fiscal 2010 designed to strengthen and streamline our operations, as well as a reduction in certain incentive plan expenses.

Operating income was $26.6 billion, $25.5 billion and $24.0 billion for fiscal 2012, 2011 and 2010, respectively. Effects of currency exchange fluctuations positively impacted operating income in fiscal
2012 and 2011 by $105 million and $231 million, respectively. Volatility in currency exchange rates may continue to impact the Companys operating income in the future.

Our effective income tax rate on consolidated income from continuing operations was 32.6% in fiscal 2012 compared with 32.2% and 32.4% in fiscal 2011 and 2010, respectively. The effective income tax rate
for fiscal 2012 remained largely consistent with the rates for fiscal 2011 and 2010 primarily as a result of net favorability in various items during fiscal 2012. The effective income tax rate for fiscal 2011 was consistent with that for fiscal 2010
due to recognizing certain net tax benefits totaling $434 million and $372 million in fiscal 2011 and 2010, respectively, stemming primarily from the decision to repatriate certain non-U.S. earnings that increased the Companys U.S. foreign tax
credits and favorable adjustments to transfer pricing agreements. The reconciliation from the U.S. statutory rate to the effective tax rates for fiscal 2012, 2011 and 2010 is presented in Note 10 in the Notes to Consolidated Financial
Statements. We expect the fiscal 2013 annual effective tax rate to be approximately 32.5% to 33.5%. Significant factors that may impact the annual effective tax rate include changes in our assessment of certain tax contingencies, valuation
allowances, changes in law, outcomes of administrative audits, the impact of discrete items and the mix of earnings among our U.S. and international operations.

As a result of the factors discussed above, we reported $16.5 billion, $16.0 billion and $15.0 billion of income from continuing operations for fiscal 2012, 2011 and 2010, respectively.

Walmart U.S. Segment

Fiscal Years
EndedJanuary 31,

(Amounts in millions, except unit counts)

2012

2011

2010

Net sales

$

264,186

$

260,261

$

259,919

Percentage change from previous fiscal year

1.5

%

0.1

%

1.1

%

Calendar comparable store sales

0.3

%

-1.5

%

-0.7

%

Operating income

$

20,367

$

19,919

$

19,314

Operating income as a percentage of net sales

7.7

%

7.7

%

7.4

%

Unit counts

3,868

3,804

3,755

Retail square feet

627

617

606

Net sales for the Walmart U.S. segment increased 1.5% and 0.1% in fiscal 2012 and 2011, respectively, compared to the
previous fiscal year. The increase in net sales for fiscal 2012 compared to fiscal 2011 is primarily due to a 1.6% increase in year-over-year retail square feet. Walmart U.S. net sales were relatively flat for fiscal 2011 compared to fiscal 2010 as
growth in retail square feet was offset by a decline in comparable store sales of 1.5% caused by slower customer traffic.

Operating expenses, as a percentage of
segment net sales, declined 10 basis points during fiscal 2012 compared to fiscal 2011, as the segment focused on improved labor productivity and managing expenses. Operating expenses, as a percentage of net sales, decreased by 28 basis points in
fiscal 2011 compared to fiscal 2010 due to improved labor productivity and a reduction in incentive plan expenses.

9

As a result of the factors discussed above, operating income was $20.4 billion, $19.9 billion and $19.3
billion for fiscal 2012, 2011 and 2010, respectively.

Walmart International Segment

Fiscal Years
EndedJanuary 31,

(Amounts in millions, except unit counts)

2012

2011

2010

Net sales

$

125,873

$

109,232

$

97,407

Percentage change from previous fiscal year

15.2

%

12.1

%

1.3

%

Operating income

$

6,214

$

5,606

$

4,901

Operating income as a percentage of net sales

4.9

%

5.1

%

5.0

%

Unit counts

5,651

4,557

4,099

Retail square feet

329

287

266

Net sales for the Walmart International segment increased 15.2% and 12.1% for fiscal 2012 and 2011, respectively,
compared to the previous fiscal year. The increase in net sales during fiscal 2012 compared to fiscal 2011 was due to year-over-year growth in retail square feet of 14.7%, including acquisitions, constant currency sales growth in every country, $4.7
billion of sales from the acquisitions of Massmart and Netto and currency translation benefits of $4.0 billion during fiscal 2012. Constant currency sales grew 7.2 percent compared to fiscal 2011. Mexico, China and the United Kingdom contributed the
highest dollar increases to Walmart Internationals net sales growth in fiscal 2012, excluding the impact of acquisitions. The increase in net sales for fiscal 2011 compared to fiscal 2010 was due to year-over-year growth in retail square feet
of 7.8%, $4.5 billion of favorable currency translation benefits and constant currency sales growth in nearly every country.

Gross profit
margin decreased 46 basis points for fiscal 2012 compared to fiscal 2011, due primarily to the acquisitions of Netto and Massmart included in the fiscal 2012 results and not in the fiscal 2011 results. Constant currency gross margin as a percentage
of sales was flat in fiscal 2012 compared to fiscal 2011. Gross profit margin was relatively flat in fiscal 2011 compared to fiscal 2010.

Segment operating expenses, as a percentage of segment net sales, decreased 19 basis points in fiscal 2012 compared to fiscal 2011 due to the
acquisitions of Netto and Massmart in fiscal 2012. Constant currency operating expenses increased slower than sales at 6.2%. The United Kingdom, Japan and Canada leveraged operating expenses most significantly in fiscal 2012. Operating expenses, as
a percentage of net sales, decreased 26 basis points in fiscal 2011 compared to fiscal 2010 due to effective expense management in Japan and the United Kingdom.

Each country had positive constant currency operating income in fiscal 2012, except India. India is a growing wholesale, cash and carry and retail franchise business with many new locations and generated
significant sales growth in fiscal 2012. Currency exchange rate fluctuations increased operating income by $105 million and $231 million in fiscal 2012 and 2011, respectively. Volatility in currency exchange rates may continue to impact the Walmart
International segments operating results in the future.

As a result of the factors discussed above, operating income was $6.2 billion,
$5.6 billion and $4.9 billion for fiscal 2012, 2011 and 2010, respectively.

10

Sams Club Segment

We believe the information in the following table under the caption Excluding Fuel is useful to investors because it permits investors to understand the effect of the Sams Club
segments fuel sales, which are impacted by the volatility of fuel prices.

Fiscal Years
EndedJanuary 31,

(Amounts in millions, except unit counts)

2012

2011

2010

Including Fuel

Net sales

$

53,795

$

49,459

$

47,806

Percentage change from previous fiscal year

8.8

%

3.5

%

-0.4

%

Calendar comparable club sales

8.4

%

3.9

%

-1.4

%

Operating income

$

1,865

$

1,711

$

1,515

Operating income as a percentage of net sales

3.5

%

3.5

%

3.2

%

Unit counts

611

609

605

Retail square feet

82

81

81

Excluding Fuel

Net sales

$

47,616

$

45,193

$

44,553

Percentage change from previous fiscal year

5.4

%

1.4

%

1.7

%

Calendar comparable club sales

5.0

%

1.9

%

0.7

%

Operating income

$

1,826

$

1,692

$

1,525

Operating income as a percentage of net sales

3.8

%

3.7

%

3.4

%

Net sales for the Sams Club segment increased 8.8% and 3.5% for fiscal 2012 and 2011, respectively, compared to the
previous fiscal year. The net sales increase in fiscal 2012 compared to fiscal 2011 was primarily due to positive comparable club sales, driven by customer traffic, increases in average ticket and higher fuel sales. Higher fuel sales, resulting from
higher fuel prices and increased gallons sold, positively impacted comparable sales by 340 basis points during fiscal 2012. The fiscal 2011 growth in net sales is primarily due to the increase in average ticket and member traffic. In addition, fuel
sales, driven by higher fuel prices and gallons sold, positively impacted comparable club sales by 200 basis points in fiscal 2011. Volatility in fuel prices may continue to impact the net sales and operating income of the Sams Club segment in
the future.

Operating expenses, as a percentage of net sales, decreased 55 basis points and 48 basis points in fiscal 2012 and 2011,
respectively, compared to the previous fiscal year. Fuel, which positively impacted the comparison by 31 and 19 basis points for fiscal 2012 and 2011, respectively, and improved wage management were the primary drivers of the basis point reduction
in operating expenses as a percentage of segment net sales for both fiscal years.

As a result of the factors discussed above, operating
income was $1.9 billion, $1.7 billion and $1.5 billion for fiscal 2012, 2011 and 2010, respectively.

Liquidity and Capital Resources

Cash flows provided by operating activities have historically supplied us with a significant source of liquidity. We use these cash flows,
supplemented with long-term debt and short-term borrowings, to fund our operations and global expansion activities. Generally, some or all of the remaining free cash flow, if any, funds all or part of the dividends on our common stock and share
repurchases.

11

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Net cash provided by operating activities

$

24,255

$

23,643

$

26,249

Payments for property and equipment

(13,510

)

(12,699

)

(12,184

)

Free cash flow

$

10,745

$

10,944

$

14,065

Net cash used in investing activities (1)

$

(16,609

)

$

(12,193

)

$

(11,620

)

Net cash used in financing activities

$

(8,458

)

$

(12,028

)

$

(14,191

)

(1)

Net cash used in investing activities includes payments for property and equipment, which is also included in our computation of free cash
flow.

Cash Flows from Operating Activities

Cash flows provided by operating activities were $24.3 billion, $23.6 billion and $26.2 billion for fiscal 2012, 2011 and 2010, respectively. The increase in operating cash flow in fiscal 2012 compared to
fiscal 2011 was primarily the result of additional income from continuing operations and the timing of payments for accrued liabilities. The decrease in cash flow from operating activities during fiscal 2011 was primarily due to an increased
investment in inventory after fiscal 2010 ended with relatively low inventory levels, partially offset by increases in accounts payable.

Cash Equivalents and Working Capital

Cash and cash equivalents were $6.6 billion and $7.4 billion at January 31, 2012 and 2011, respectively, of which, $5.6 billion and $7.1 billion,
respectively, were held outside of the U.S. and are generally utilized to support liquidity needs in our foreign operations. Our working capital deficits were $7.3 billion and $6.6 billion at January 31, 2012 and 2011, respectively. We
generally operate with a working capital deficit due to our efficient use of cash in funding operations and in providing returns to our shareholders in the form of stock repurchases and the payment of dividends.

We employ financing strategies in an effort to ensure that cash can be made available in the country in which it is needed with the minimum cost
possible. We do not believe it will be necessary to repatriate cash and cash equivalents held outside of the U.S. and anticipate our domestic liquidity needs will be met through other funding sources (ongoing cash flows generated from operations,
external borrowings, or both). Accordingly, we intend, with only certain limited exceptions, to continue to permanently reinvest the cash in our foreign operations. Were our intention to change, most of the amounts held within our foreign operations
could be repatriated to the U.S., although any repatriations under current U.S. tax laws would be subject to U.S. federal income taxes, less applicable foreign tax credits. As of January 31, 2012 and 2011, approximately $768 million and $691
million, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. We do not expect local laws, other limitations or potential taxes on anticipated future repatriations of amounts held outside of the United
States to have a material effect on our overall liquidity, financial condition or results of operations.

Cash Flows from Investing
Activities

Cash flows from investing activities generally consist of payments for property and equipment, which were $13.5 billion,
$12.7 billion and $12.2 billion during fiscal 2012, 2011 and 2010, respectively. These capital expenditures primarily relate to new store growth, as well as remodeling costs for existing stores and our investments in Global eCommerce. Additionally,
in fiscal 2012, we made additional investments of $3.5 billion, net of cash acquired, for the acquisitions of Netto and Massmart, further discussed in Note 14 in Notes to Consolidated Financial Statements, in addition to other immaterial
acquisitions. We expect capital expenditures for property and equipment in fiscal 2013, excluding any business acquisitions, to range between $13.0 billion and $14.0 billion.

Global Expansion Activities

We expect to finance our fiscal 2013 global expansion plans
primarily through cash flows from operations and future debt financings. The following table represents our estimated range for capital expenditures and growth in retail square feet by segment for fiscal 2013. This table does not include growth in
retail square feet from pending or future acquisitions.

Fiscal Year 2013Projected CapitalExpenditures(in billions)

Fiscal Year 2013Projected Growth
inRetail Square Feet(in thousands)

Walmart U.S. segment (including Other)

$

7.0

to

$

7.5

14,000

to

15,000

Sams Club segment

1.0

to

1.0

1,000

to

1,000

Total U.S.

8.0

to

8.5

15,000

to

16,000

Walmart International segment

5.0

to

5.5

30,000

to

33,000

Grand Total

13.0

to

14.0

45,000

to

49,000

12

The following table represents the allocation of our capital expenditures for property and equipment:

Allocation of Capital ExpendituresFiscal Years Ending January 31,

Projected

Actual

2013

2012

2011

New stores and clubs, including expansions and relocations

37

%

28

%

24

%

Remodels

8

%

12

%

26

%

Information systems, distribution and other

18

%

21

%

19

%

Total United States

63

%

61

%

69

%

Walmart International

37

%

39

%

31

%

Total Capital Expenditures

100

%

100

%

100

%

Cash Flows from Financing Activities

Cash flows from financing activities generally consist of transactions related to our short- and long-term debt, as well as dividends paid and the repurchase of Company stock.

Short-Term Borrowings

Net short-term
borrowings increased by $3.0 billion and $503 million in fiscal 2012 and fiscal 2011, respectively, and decreased by $1.0 billion in fiscal 2010. From time to time, we utilize the liquidity under our short-term borrowing programs to fund our
operations, dividend payments, share repurchases, capital expenditures and for other cash requirements and corporate purposes on an as-needed basis. We utilized the favorable interest rates available on our commercial paper and increased our
short-term borrowings throughout fiscal 2012.

Long-Term Debt

Proceeds from the issuance of long-term debt were $5.1 billion, $11.4 billion and $5.5 billion for fiscal 2012, 2011 and 2010, respectively. The proceeds from the issuance of long-term debt were used to
pay down or refinance existing debt, and for other general corporate purposes.

Information on our significant issuances of long-term debt
during fiscal 2012 is as follows (amounts in millions):

Issue Date

Maturity Date

Interest Rate

Principal Amount

April 18, 2011

April 15, 2014

1.625

%

$

1,000

April 18, 2011

April 15, 2016

2.800

%

1,000

April 18, 2011

April 15, 2021

4.250

%

1,000

April 18, 2011

April 15, 2041

5.625

%

2,000

Total

$

5,000

The notes of each series require semi-annual interest payments on April 15 and October 15 of each year, with
the first interest payment having commenced on October 15, 2011. Unless previously purchased and canceled, the Company will repay the notes of each series at 100% of their principal amount, together with accrued and unpaid interest thereon, at
their maturity. The notes of each series are senior, unsecured obligations of the Company.

Dividends

On March 1, 2012, our Board of Directors approved an annual dividend for fiscal 2013 of $1.59 per share, an increase of approximately 9% over the
dividends paid in fiscal 2012. Dividends per share were $1.46 and $1.21 in fiscal 2012 and 2011, respectively. For fiscal 2013, the annual dividend will be paid in four quarterly installments of $0.3975 per share, according to the following record
and payable dates:

13

Record Date

Payable Date

March 12, 2012

April 4, 2012

May 11, 2012

June 4, 2012

August 10, 2012

September 4, 2012

December 7, 2012

January 2, 2013

We paid aggregate dividends of $5.0 billion, $4.4 billion and $4.2 billion for fiscal 2012, 2011 and 2010, respectively.
We expect to pay aggregate dividends of approximately $5.4 billion in fiscal 2013.

Company Share Repurchase Program

From time to time, we have repurchased shares of our common stock under share repurchase programs authorized by the Board of Directors. The current share
repurchase program has no expiration date or other restriction limiting the period over which we can make share repurchases. At January 31, 2012, authorization for $11.3 billion of additional share repurchases remained under the current share
repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.

We consider several factors in
determining when to execute the share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings and the market price of our common stock. Cash paid for share repurchases during fiscal 2012, 2011 and
2010 was as follows:

Share Repurchases

TotalNumber of SharesRepurchased(in millions)

Average PricePaid per Share

Total Investment(in
billions)

Fiscal year ended January 31, 2012

115.3

$

54.64

$

6.3

Fiscal year ended January 31, 2011

279.1

$

53.03

$

14.8

Fiscal year ended January 31, 2010

145.5

$

50.17

$

7.3

Capital Resources

Management believes cash flows from continuing operations and proceeds from the issuance of short-term borrowings will be sufficient to finance seasonal buildups in merchandise inventories and meet other
cash requirements. If our operating cash flows are not sufficient to pay dividends and to fund our capital expenditures, we anticipate funding any shortfall in these expenditures with a combination of short-term borrowings and long-term debt. We
plan to refinance existing long-term debt obligations as they mature and may desire to obtain additional long-term financing for other corporate purposes.

Our access to the commercial paper and long-term debt markets has historically provided us with substantial sources of liquidity. We anticipate no difficulty in obtaining financing from those markets in
the future in view of our favorable experiences in the debt markets in the recent past. Our ability to continue to access the commercial paper and long-term debt markets on favorable interest rate and other terms will depend, to a significant
degree, on the ratings assigned by the credit rating agencies to our indebtedness continuing to be at or above the level of our current ratings. At January 31, 2012, the ratings assigned to our commercial paper and rated series of our
outstanding long-term debt were as follows:

Rating agency

Commercial paper

Long-term debt

Standard & Poors

A-1+

AA

Moodys Investors Service

P-1

Aa2

Fitch Ratings

F1+

AA

DBRS Limited

R-1(middle)

AA

In the event that the ratings of our commercial paper or any rated series of our outstanding long-term debt issues were
lowered or withdrawn for any reason or if the ratings assigned to any new issue of our long-term debt securities were lower than those noted above, our ability to access the debt markets would be adversely affected. In addition, in such a case, our
cost of funds for new issues of commercial paper and long-term debt (i.e., the rate of interest on any such indebtedness) would be higher than our cost of funds had the ratings of those new issues been at or above the level of the ratings noted
above. The rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated
independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.

14

To monitor our credit ratings and our capacity for long-term financing, we consider various qualitative and
quantitative factors. We monitor the ratio of our debt-to-total capitalization as support for our long-term financing decisions. At January 31, 2012 and 2011, the ratio of our debt-to-total capitalization was 42.8% and 42.1%, respectively. For
the purpose of this calculation, debt is defined as the sum of short-term borrowings, long-term debt due within one year, obligations under capital leases due within one year, long-term debt and long-term obligations under capital leases. Total
capitalization is defined as debt plus total Walmart shareholders equity. The ratio of our debt-to-total capitalization increased in fiscal 2012 as we increased our long-term debt and commercial paper as a result of favorable interest rates.
Additionally, our share repurchases contributed to the increase in our debt-to-total capitalization ratio in fiscal 2012.

Contractual
Obligations and Other Commercial Commitments

The following table sets forth certain information concerning our obligations and commitments
to make contractual future payments, such as debt and lease agreements, and certain contingent commitments:

Payments Due During Fiscal Years Ending January 31,

(Amounts in millions)

Total

2013

2014-2015

2016-2017

Thereafter

Recorded Contractual Obligations:

Long-term debt

$

45,862

$

1,975

$

9,095

$

5,880

$

28,912

Short-term borrowings

4,047

4,047







Capital lease obligations

5,935

608

1,112

954

3,261

Unrecorded Contractual Obligations:

Non-cancelable operating leases

16,415

1,644

3,115

2,740

8,916

Estimated interest on long-term debt

33,534

1,976

3,589

3,212

24,757

Trade letters of credit

2,885

2,885







Purchase obligations

4,769

3,401

1,147

218

3

Total Commercial Commitments

$

113,447

$

16,536

$

18,058

$

13,004

$

65,849

Additionally, the Company has approximately $18.5 billion in undrawn lines of credit and standby letters of credit which,
if drawn upon, would be included in the liabilities section of the Companys Consolidated Balance Sheets.

Estimated interest payments
are based on our principal amounts and expected maturities of all debt outstanding at January 31, 2012 and managements forecasted market rates for our variable rate debt.

Purchase obligations include legally binding contracts such as firm commitments for inventory and utility purchases, as well as commitments to make capital expenditures, software acquisition/license
commitments and legally binding service contracts. Purchase orders for the purchase of inventory and other services are not included in the preceding table. Purchase orders represent authorizations to purchase rather than binding agreements. For the
purposes of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased;
fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current inventory needs and are fulfilled by our suppliers within short time periods. We also enter into contracts for
outsourced services; however, the obligations under these contracts are not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

The expected timing for payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid with respect to some unrecorded contractual
commitments may be different depending on the timing of receipt of goods or services or changes to agreed-upon amounts for some obligations.

In addition to the amounts shown in the table above, $611 million of unrecognized tax benefits are considered uncertain tax positions and have been
recorded as liabilities. The timing of the payment associated with these liabilities is uncertain. Refer to Note 10 in the Notes to Consolidated Financial Statements for additional discussion on unrecognized tax benefits.

Off Balance Sheet Arrangements

In
addition to the unrecorded contractual obligations discussed and presented above, we have made certain arrangements as discussed below for which the timing of payment, if any, is unknown.

In connection with certain debt financing, we could be liable for early termination payments if certain unlikely events were to occur. At
January 31, 2012, the aggregate termination payment would have been $122 million. The arrangement pursuant to which this payment could be made will expire in fiscal 2019.

15

The Company has future lease commitments for land and buildings for approximately 425 future locations.
These lease commitments have lease terms ranging from 4 to 50 years and provide for certain minimum rentals. If executed, payments under operating leases would increase by $92 million for fiscal 2013, based on current cost estimates.

Market Risk

In addition to the risks
inherent in our operations, we are exposed to certain market risks, including changes in interest rates and changes in currency exchange rates.

The analysis presented below for each of our market risk sensitive instruments is based on a hypothetical scenario used to calibrate potential risk and
does not represent our view of future market changes. The effect of a change in a particular assumption is calculated without adjusting any other assumption. In reality, however, a change in one factor could cause a change in another, which may
magnify or negate other sensitivities.

Interest Rate Risk

We are exposed to changes in interest rates as a result of our short-term borrowings and long-term debt issuances. We hedge a portion of our interest rate risk by managing the mix of fixed and variable
rate debt and entering into interest rate swaps.

The table below provides information about our financial instruments that are sensitive to
changes in interest rates. For debt obligations, the table represents the principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, the table represents the contractual cash flows and
weighted-average interest rates by the contractual maturity date. The notional amounts are used to calculate contractual cash flows to be exchanged under the contracts. The weighted-average variable rates are based upon prevailing market rates at
January 31, 2012.

Expected Maturity Date

FY13

FY14

FY15

FY16

FY17

Thereafter

Total

(Dollar amounts in millions)

Liabilities

Short-term borrowings:

Variable rate

$

4,047

$



$



$



$



$



$

4,047

Average interest rate

0.1

%











0.1

%

Long-term debt:

Fixed rate

$

1,475

$

4,512

$

3,706

$

4,357

$

1,130

$

28,912

$

44,092

Average interest rate

4.8

%

3.9

%

2.2

%

2.3

%

2.8

%

5.3

%

4.6

%

Variable rate

$

500

$

656

$

221

$

393

$



$



$

1,770

Average interest rate

5.2

%

0.8

%

0.9

%

0.6

%





2.0

%

Interest rate derivatives

Interest rate swaps:

Variable to fixed

$



$

656

$

222

$

392

$



$



$

1,270

Average pay rate



2.0

%

1.5

%

0.9

%





1.6

%

Average receive rate



0.8

%

0.9

%

0.6

%





0.8

%

Fixed to variable

$

500

$

2,445

$

1,000

$



$



$



$

3,945

Average pay rate

3.1

%

1.0

%

0.4

%







1.1

%

Average receive rate

5.0

%

5.0

%

3.1

%







4.5

%

As of January 31, 2012, our variable rate borrowings, including the effect of our commercial paper and interest rate
swaps, represented 17% of our total short-term and long-term debt. Based on January 31, 2012 and 2011 debt levels, a 100 basis point change in prevailing market rates would cause our annual interest costs to change by approximately $58 million
and $59 million, respectively.

Foreign Currency Risk

We are exposed to changes in foreign currency exchange rates as a result of our net investments and operations in countries other than the United States. We hedge a portion of our foreign currency risk by
entering into currency swaps and designating certain long-term debt issued in foreign currencies as net investment hedges.

We hold currency
swaps to hedge the currency exchange component of our net investments and also to hedge the currency exchange rate fluctuation exposure associated with the forecasted payments of principal and interest of non-U.S. denominated debt. The aggregate
fair value of these swaps was recorded as an asset of $313 million and $471 million at January 31, 2012

16

and 2011, respectively. A hypothetical 10% increase or decrease in the currency exchange rates underlying these swaps from the market rate would have resulted in a loss or gain in the value of
the swaps of $67 million and $74 million at January 31, 2012 and 2011, respectively. A hypothetical 10% change in interest rates underlying these swaps from the market rates in effect at January 31, 2012 and 2011 would have resulted in a
loss or gain in value of the swaps of $21 million and $7 million, respectively, on the value of the swaps.

In addition to currency swaps, we
have designated debt of approximately £3.0 billion as of January 31, 2012 and 2011 as a hedge of our net investment in the United Kingdom. At January 31, 2012 and 2011, a hypothetical 10% increase or decrease in value of the U.S.
dollar relative to the British pound would have resulted in a gain or loss, respectively, in the value of the debt of $430 million and $480 million, respectively. In addition, we have designated debt of approximately ¥275.0 billion and
¥437.0 billion as of January 31, 2012 and 2011, respectively, as a hedge of our net investment in Japan. At January 31, 2012 and 2011, a hypothetical 10% increase or decrease in value of the U.S. dollar relative to the Japanese yen
would have resulted in a gain or loss in the value of the debt of $328 million and $533 million, respectively.

Summary of Critical
Accounting Estimates

Management strives to report our financial results in a clear and understandable manner, although in some cases
accounting and disclosure rules are complex and require us to use technical terminology. In preparing the Companys Consolidated Financial Statements, we follow accounting principles generally accepted in the United States. These principles
require us to make certain estimates and apply judgments that affect our financial position and results of operations as reflected in our financial statements. These judgments and estimates are based on past events and expectations of future
outcomes. Actual results may differ from our estimates.

Management continually reviews our accounting policies, how they are applied and how
they are reported and disclosed in our financial statements. Following is a summary of our critical accounting estimates and how they are applied in preparation of the financial statements.

Inventories

We value inventories at the lower of cost or market as determined
primarily by the retail method of accounting, using the last-in, first-out (LIFO) method for substantially all of the Walmart U.S. segments merchandise inventories. The retail method of accounting results in inventory being valued
at the lower of cost or market since permanent markdowns are currently taken as a reduction of the retail value of inventory. The Sams Club segments merchandise is valued based on the weighted-average cost using the LIFO method.
Inventories for the Walmart International operations are primarily valued by the retail method of accounting and are stated using the first-in, first-out (FIFO) method.

Under the retail method, inventory is stated at cost, which is determined by applying a cost-to-retail ratio to each merchandise groupings retail value. The FIFO cost-to-retail ratio is based on the
initial margin of beginning inventory plus the fiscal year purchase activity. The cost-to-retail ratio for measuring any LIFO provision is based on the initial margin of the fiscal year purchase activity less the impact of any markdowns. The retail
method requires management to make certain judgments and estimates that may significantly impact the ending inventory valuation at cost, as well as the amount of gross profit recognized. Judgments made include recording markdowns used to sell
inventory and shrinkage. When management determines the salability of inventory has diminished, markdowns for clearance activity and the related cost impact are recorded. Factors considered in the determination of markdowns include current and
anticipated demand, customer preferences and age of merchandise, as well as seasonal and fashion trends. Changes in weather patterns and customer preferences related to fashion trends could cause material changes in the amount and timing of
markdowns from year to year.

When necessary, we record a LIFO provision for the estimated annual effect of inflation, and these estimates are
adjusted to actual results determined at year-end. Our LIFO provision is calculated based on inventory levels, markup rates and internally generated retail price indices. At January 31, 2012 and 2011, our inventories valued at LIFO approximated
those inventories as if they were valued at FIFO.

We provide for estimated inventory losses (shrinkage) between physical
inventory counts on the basis of a percentage of sales. Following annual inventory counts, the provision is adjusted to reflect updated historical results.

Impairment of Assets

We evaluate long-lived assets other than goodwill and assets
with indefinite lives for indicators of impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Managements judgments regarding the existence of impairment indicators are based on market
conditions and operational performance, such as operating income and cash flows. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally at the individual store level or, in certain
circumstances, at the market group level. The variability of these factors depends on a

17

number of conditions, including uncertainty about future events and changes in demographics. Thus, our accounting estimates may change from period to period. These factors could cause management
to conclude that impairment indicators exist and require impairment tests be performed, which could result in management determining the value of long-lived assets is impaired, resulting in a write-down of the long-lived assets.

Goodwill and other indefinite-lived acquired intangible assets are not amortized, but are evaluated for impairment annually or whenever events or changes
in circumstances indicate that the value of a certain asset may be impaired. This evaluation begins with a qualitative assessment to determine whether a quantitative goodwill impairment test is necessary. If we determine, based on the qualitative
factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the quantitative goodwill impairment test would be required. This quantitative test for impairment requires management to make judgments
relating to future cash flows, growth rates, and economic and market conditions. These evaluations are based on determining the fair value of a reporting unit or asset using a valuation method such as discounted cash flow or a relative, market-based
approach. Historically, we have generated sufficient returns within the applicable reporting units to recover the cost of goodwill and other indefinite-lived acquired intangible assets. Because of the nature of the factors used in these tests, if
different conditions occur in future periods, future operating results could be materially impacted.

Income Taxes

Income taxes have a significant effect on our net earnings. As a global commercial enterprise, our tax rates are affected by many factors, including our
global mix of earnings, the extent to which those global earnings are indefinitely reinvested outside the United States, legislation, acquisitions, dispositions and tax characteristics of our income. Our tax returns are routinely audited and
settlements of issues raised in these audits sometimes affect our tax provisions. Accordingly, the determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex
tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in our financial
statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, we reassess these probabilities and record any
changes in the financial statements as appropriate. We account for uncertain tax positions by determining the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. This
determination requires the use of judgment in assessing the timing and amounts of deductible and taxable items.

Forward-Looking Statements

This Annual Report contains statements that Walmart believes are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Those statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. Those forward-looking statements include statements in
Managements Discussion and Analysis of Financial Condition and Results of Operations: under the captions Company Performance MetricsGrowth Net Sales and Results of OperationsConsolidated
Results of Operations with respect to the volatility of currency exchange rates possibly continuing to affect Walmarts net sales in the future; under the caption Results of OperationsConsolidated Results of
Operations with respect to the volatility of currency exchange rates possibly continuing to affect Walmarts operating income in the future and with respect to Walmarts fiscal 2013 annual effective tax rate and the factors that
may impact that annual effective tax rate; under the caption Results of OperationsWalmart International Segment with respect to the volatility of currency exchange rates possibly continuing to affect our Walmart
International segments operating results in the future; under the caption Results of OperationsSams Club Segment with respect to the volatility of fuel prices possibly continuing to affect our Sams Club
segments net sales and operating income in the future; under the caption Liquidity and Capital ResourcesCash Equivalents and Working Capital,  as well as in Note 1 in the Notes to Consolidated Financial
Statements, regarding our ability to meet our liquidity needs through sources other than the cash we hold outside of the United States, our intention to permanently reinvest cash held outside of the United States, and our ability to repatriate
cash held outside of the United States; under the caption Liquidity and Capital ResourcesCash Flows from Investing Activities with respect to Walmarts expected capital expenditures in fiscal 2013; under the caption
Liquidity and Capital ResourcesCash Flows from Investing ActivitiesGlobal Expansion Activities with respect to Walmarts expectation that it will finance its fiscal 2013 global expansion plans primarily through
cash flows from operations and future debt financings, with respect to Walmarts projected capital expenditures in fiscal 2013, with respect to the projected growth in retail square feet in total and by operating segment in fiscal 2013, and
with respect to the projected allocation of capital expenditures for property and equipment by category in fiscal 2013; under the caption Liquidity and Capital ResourcesCash Flows from Financing ActivitiesDividends, as
well as in Note 16 in the Notes to Consolidated Financial Statements and under the caption Walmart-Corporate and Stock Information-Dividends payable per share, with respect to the payment of dividends in fiscal 2013,
Walmarts expected payment of dividends on certain dates in fiscal 2013, and the expected total amount of dividends to be paid in fiscal 2013; under the caption Liquidity and Capital ResourcesCapital Resources with
respect to Walmarts ability to finance seasonal build-ups in inventories and to meet other cash requirements with cash flows from operations and short-term borrowings, Walmarts ability to fund certain cash flow shortfalls by short-term
borrowings and long-term debt, Walmarts plan to refinance long-term debt as it matures, Walmarts anticipated funding of any shortfall in cash to pay dividends and make capital expenditures through short-term borrowings and long-term
debt, Walmarts plan to refinance existing long-term debt as it matures, the possibility that

18

Walmart may obtain additional long-term financing for other corporate purposes, Walmarts ability to obtain financing from the commercial paper and long-term debt markets, the factors that
influence Walmarts ability to access those markets on favorable terms, and the factors that could adversely affect Walmarts ability to access those markets on favorable terms; and under the caption Off Balance Sheet
Arrangements with respect to the amount of increases in payments under operating leases if certain leases are executed.

These
forward-looking statements also include statements in: Note 3 in the Notes to Consolidated Financial Statements regarding the weighted-average periods over which certain compensation cost is expected to be recognized; Note 10 in the
Notes to Consolidated Financial Statements regarding the possible reduction of U.S. tax liability on accumulated but undistributed earnings of our non-U.S. subsidiaries, the realization of certain deferred tax assets, possible reduction
of unrecognized tax benefits, and the reasons for such reductions and the magnitude of their impact on our results of operations and financial condition; and the effect of the adverse resolutions of certain other tax matters; Note 11 in the
Notes to Consolidated Financial Statements regarding an adverse decision in, or settlement of, certain litigation or other legal proceedings to which Walmart is a party or is subject possibly resulting in liability material to our
financial condition or results of operations; and Note 14 in the Notes to Consolidated Financial Statements with respect to Walmarts expected completion of a certain acquisition in the future after certain conditions are satisfied.
The letter of our President and Chief Executive Officer appearing in this Annual Report includes forward-looking statements that relate to managements expectation that the Walmart International segments Powered by Walmart
initiatives will strengthen productivity and reduce expenses, managements expectation that growing the Sams Club segments membership base will remain a key goal for fiscal 2013, and managements plans to increase
Walmarts investment in Yihaodian to 51 percent in fiscal 2013 and to continue Walmarts investments to leverage additional opportunities in e-commerce. Forward-looking statements appear in this Annual Report: under the caption
Walmart International-Our Strategy: Meeting local needs and leveraging global resources regarding Walmarts intention to be the low cost leader in every market where our Walmart International segment operates and managements
expectation that our Walmart International segment will add between 30 million and 33 million square feet of retail space in fiscal 2013; under the caption Sams Club-Our Strategy: Leveraging Member insights to deliver value and
quality regarding the plans of our Sams Club segment to open nine new clubs and relocate or expand six other clubs in fiscal 2013; under the caption Global eCommerce-Our Strategy: Winning in Global eCommerce regarding
Walmarts goal of combining online, social and mobile innovations with physical stores to give customers a multi-channel shopping experience and managements expectation that Walmarts acquisition of a majority stake in Yihaodian will
open Walmarts products and brands to consumers in China; and under the caption Walmart-2012 Financial Report regarding managements plan to further strengthen Walmarts price position by leveraging expenses as a
percentage of sales by an additional 100 basis points over the next five years and managements expectation that Walmart will execute disciplined growth while incorporating new initiatives to design and build the most cost effective stores in
the world. The forward-looking statements described above are identified by the use in such statements of one or more of the words or phrases anticipate, could be, could reduce, estimated,
expansion, expect, goal, grow, intend, is expected, may continue, may impact, may result, plan, plans,
projected, will add, will be, will be paid, will depend, will execute, will open, will reduce, will strengthen, would be,
and would increase, and other similar words or phrases. Similarly, descriptions of our objectives, strategies, plans, goals, or targets are also forward-looking statements. These statements discuss, among other things, expected growth,
future revenues, future cash flows, future capital expenditures, future performance, future initiatives and the anticipation and expectations of Walmart and its management as to future occurrences and trends.

The forward-looking statements included in this Annual Report and that we make elsewhere are subject to certain factors, in the United States and
internationally, which could materially affect our financial performance, our financial condition, our results of operations, including our sales, earnings per share, comparable store sales, or comparable club sales for any period, our liquidity,
our effective tax rate for any period, and our business operations, business strategy, plans, goals, or objectives. These factors include, but are not limited to: general economic conditions, including changes in the economy of the United States or
other specific markets in which we operate, economic instability, changes in the monetary policies of the United States, the Board of Governors of the Federal Reserve System, other governments or central banks, economic crises and disruptions in the
financial markets, including as a result of sovereign debt crises, governmental budget deficits, unemployment and partial employment levels, employment conditions within our markets, credit availability to consumers and businesses, levels of
consumer disposable income, consumer confidence, consumer credit availability, consumer spending patterns. consumer debt levels, inflation, deflation, commodity prices, the cost of the goods we sell, competitive pressures, the seasonality of our
business, seasonal buying patterns in the United States and our other markets, labor costs, transportation costs, the cost of diesel fuel, gasoline, natural gas and electricity, the selling prices of fuel, the cost of healthcare and other benefits,
accident costs, our casualty and other insurance costs, information security costs, the cost of construction materials, availability of acceptable building sites for new stores, clubs and other formats, availability of qualified labor pools in the
specific markets in which we operate, zoning, land use and other regulatory restrictions, competitive pressures, accident-related costs, weather conditions and events, catastrophic events and natural disasters, as well as storm and other damage to
our stores, clubs, distribution centers, and other facilities, and store closings and other limitations on our customer access to our stores and clubs resulting from such events and disasters, disruption in our supply chain, including
availability and transport of goods from domestic and foreign suppliers, trade restrictions, changes in tariff and freight rates, adoption of or changes in tax, labor, and other laws and regulations that affect our business, including changes in
corporate tax rates, costs of compliance with laws and regulations, the resolution of tax matters, developments in and the outcome of legal and regulatory proceedings to which we are a party or are subject, currency exchange rate fluctuations and
volatility, fluctuations in market rates of interest, and other conditions and events affecting domestic and global financial and capital markets, and economic and geopolitical conditions and events, including civil unrest and disturbances,

19

public health emergencies, and terrorist attacks. Moreover, we typically earn a disproportionate part of our annual operating income in our fourth quarter as a result of the seasonal buying
patterns. Those buying patterns are difficult to forecast with certainty. The foregoing list of factors that may affect our business operations and financial performance is not exclusive. Other factors and unanticipated events could adversely affect
our business operations and financial performance. We discuss certain of these matters more fully, as well as certain risk factors that may affect our business operations, financial condition, results of operations and liquidity in other of our
filings with the Securities and Exchange Commission (the SEC), including our Annual Report on Form 10-K. We filed our Annual Report on Form 10-K for the fiscal year ended January 31, 2012, with the SEC on March 27, 2012. The
forward-looking statements described above are made based on knowledge of our business and the environment in which we operate and assumptions that we believe to be reasonable at the time such forward-looking statements are made. However, because of
the factors described and listed above, as well as other factors, or as a result of changes in facts, assumptions not being realized, or other circumstances, actual results may materially differ from anticipated results described or implied in these
forward-looking statements. We cannot assure the reader that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences
for us or affect us, our business, our operations, or our financial performance in the way we expect. You are urged to consider all of these risks, uncertainties, and other factors carefully in evaluating the forward-looking statements and not to
place undue reliance on such forward-looking statements. The forward-looking statements included in this Annual Report speak only as of the date of this report, and we undertake no obligation to update these forward-looking statements to reflect
subsequent events or circumstances, except as may be required by applicable law.

20

WAL-MART STORES, INC.

Consolidated Statements of Income

$ 000,000,00

$ 000,000,00

$ 000,000,00

Fiscal Years Ended January 31,

(Amounts in millions except per share data)

2012

2011

2010

Revenues:

Net sales

$

443,854

$

418,952

$

405,132

Membership and other income

3,096

2,897

2,953

446,950

421,849

408,085

Costs and expenses:

Cost of sales

335,127

314,946

304,106

Operating, selling, general and administrative expenses

85,265

81,361

79,977

Operating income

26,558

25,542

24,002

Interest:

Debt

2,034

1,928

1,787

Capital leases

288

277

278

Interest income

(162

)

(201

)

(181

)

Interest, net

2,160

2,004

1,884

Income from continuing operations before income taxes

24,398

23,538

22,118

Provision for income taxes:

Current

6,742

6,703

7,643

Deferred

1,202

876

(487

)

7,944

7,579

7,156

Income from continuing operations

16,454

15,959

14,962

Income (loss) from discontinued operations, net of tax

(67

)

1,034

(79

)

Consolidated net income

16,387

16,993

14,883

Less consolidated net income attributable to noncontrolling interest

(688

)

(604

)

(513

)

Consolidated net income attributable to Walmart

$

15,699

$

16,389

$

14,370

Basic net income per common share:

Basic income per common share from continuing operations attributable to Walmart

$

4.56

$

4.20

$

3.74

Basic income (loss) per common share from discontinued operations attributable to Walmart

(0.02

)

0.28

(0.02

)

Basic net income per common share attributable to Walmart

$

4.54

$

4.48

$

3.72

Diluted net income per common share:

Diluted income per common share from continuing operations attributable to Walmart

$

4.54

$

4.18

$

3.73

Diluted income (loss) per common share from discontinued operations attributable to Walmart

Includes $61 million, $20 million and $14 million in fiscal 2012, 2011 and 2010, respectively, related to the redeemable noncontrolling interest.

(2)

Includes $(66) million, $97 million and $46 million in fiscal 2012, 2011 and 2010, respectively, related to the redeemable noncontrolling interest.

See accompanying notes.

24

WAL-MART STORES, INC.

Consolidated Statements of Cash Flows

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Cash flows from operating activities:

Consolidated net income

$

16,387

$

16,993

$

14,883

Loss (income) from discontinued operations, net of tax

67

(1,034

)

79

Income from continuing operations

16,454

15,959

14,962

Adjustments to reconcile income from continuing operations to net cash provided by operating activities:

Depreciation and amortization

8,130

7,641

7,157

Deferred income taxes

1,050

651

(504

)

Other operating activities

398

1,087

318

Changes in certain assets and liabilities, net of effects of acquisitions:

Accounts receivable

(796

)

(733

)

(297

)

Inventories

(3,727

)

(3,205

)

2,213

Accounts payable

2,687

2,676

1,052

Accrued liabilities

59

(433

)

1,348

Net cash provided by operating activities

24,255

23,643

26,249

Cash flows from investing activities:

Payments for property and equipment

(13,510

)

(12,699

)

(12,184

)

Proceeds from disposal of property and equipment

580

489

1,002

Investments and business acquisitions, net of cash acquired

(3,548

)

(202

)



Other investing activities

(131

)

219

(438

)

Net cash used in investing activities

(16,609

)

(12,193

)

(11,620

)

Cash flows from financing activities:

Net change in short-term borrowings

3,019

503

(1,033

)

Proceeds from issuance of long-term debt

5,050

11,396

5,546

Payments of long-term debt

(4,584

)

(4,080

)

(6,033

)

Dividends paid

(5,048

)

(4,437

)

(4,217

)

Purchase of Company stock

(6,298

)

(14,776

)

(7,276

)

Purchase of redeemable noncontrolling interest





(436

)

Payment of capital lease obligations

(355

)

(363

)

(346

)

Other financing activities

(242

)

(271

)

(396

)

Net cash used in financing activities

(8,458

)

(12,028

)

(14,191

)

Effect of exchange rates on cash and cash equivalents

(33

)

66

194

Net increase (decrease) in cash and cash equivalents

(845

)

(512

)

632

Cash and cash equivalents at beginning of year

7,395

7,907

7,275

Cash and cash equivalents at end of year

$

6,550

$

7,395

$

7,907

Supplemental disclosure of cash flow information:

Income tax paid

$

5,899

$

6,984

$

7,389

Interest paid

2,346

2,163

2,141

See accompanying notes.

25

Notes to Consolidated Financial Statements

Wal-Mart Stores, Inc.

Note 1. Summary of Significant Accounting Policies

General

Wal-Mart Stores, Inc. (Walmart or the Company) operates retail stores in various formats around the world, aggregated into three
reportable segments: the Walmart U.S. segment; the Walmart International segment; and the Sams Club segment. Walmart is committed to saving people money so they can live better. Walmart earns the trust of its customers everyday by providing a
broad assortment of quality merchandise and services at everyday low prices (EDLP) while fostering a culture that rewards and embraces mutual respect, integrity and diversity. EDLP is the Companys pricing philosophy under which it
prices items at a low price every day so its customers trust that its prices will not change under frequent promotional activity.

Principles of Consolidation

The
Consolidated Financial Statements include the accounts of Walmart and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Investments in unconsolidated affiliates, which are 50% or less owned
and do not meet the consolidation criteria of Topic 810 of the Financial Accounting Standards Codification (ASC), are accounted for using the equity method. These investments are immaterial to the Companys Consolidated Financial
Statements.

The Companys operations in the United States (U.S.) and Canada are consolidated using a January 31 fiscal
year-end. The Companys operations in 12 countries in Africa, Argentina, Brazil, 5 countries in Central America, Chile, China, India, Japan, Mexico and the United Kingdom are consolidated using a December 31 fiscal year-end, generally due
to statutory reporting requirements. There were no significant intervening events during January 2012 which materially affected the Consolidated Financial Statements.

Use of Estimates

The Consolidated Financial Statements have been prepared in
conformity with accounting principles generally accepted in the United States. Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Managements estimates and
assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Cash and Cash Equivalents

The Company considers investments with a maturity when purchased of three months or less to be cash equivalents. All credit card, debit card and electronic benefits transfer transactions that process in
less than seven days are classified as cash and cash equivalents. The amounts due from banks for these transactions classified as cash totaled $1.2 billion at January 31, 2012 and 2011. In addition, cash and cash equivalents includes restricted
cash primarily related to cash collateral holdings from various counterparties, as required by certain derivative and trust agreements, of $547 million and $504 million at January 31, 2012 and 2011, respectively.

The Companys cash balances are held in various locations around the world. Of the Companys $6.6 billion and $7.4 billion of cash and cash
equivalents at January 31, 2012 and 2011, respectively, $5.6 billion and $7.1 billion, respectively, were held outside of the U.S. and are generally utilized to support liquidity needs in the Companys foreign operations.

The Company employs financing strategies in an effort to ensure that cash can be made available in the country in which it is needed with the minimum
cost possible. The Company does not believe it will be necessary to repatriate cash and cash equivalents held outside of the U.S. and anticipates its domestic liquidity needs will be met through other funding sources (ongoing cash flows generated
from operations, external borrowings, or both). Accordingly, the Company intends, with only certain limited exceptions, to continue to permanently reinvest the cash in its foreign operations. Were the Companys intention to change, most of the
amounts held within the Companys foreign operations could be repatriated to the U.S., although any repatriations under current U.S. tax laws would be subject to U.S. federal income taxes, less applicable foreign tax credits. As of
January 31, 2012 and 2011, approximately $768 million and $691 million, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions. The Company does not expect local laws, other limitations or potential
taxes on anticipated future repatriations of amounts held outside of the United States to have a material effect on its overall liquidity, financial condition or results of operations.

26

Receivables

Receivables are stated at their carrying values, net of a reserve for doubtful accounts. Receivables consist primarily of amounts due from:



insurance companies resulting from pharmacy sales;



banks for customer credit card, debit card and electronic bank transfers that take in excess of seven days to process;



suppliers for marketing or incentive programs;



consumer financing programs in certain international subsidiaries; and



real estate transactions.

The Company establishes a reserve for doubtful accounts based on historical trends in collection of past due amounts and write-off history. The total
reserve for doubtful accounts was $323 million and $252 million at January 31, 2012 and 2011, respectively.

Walmart International offers
a limited amount of consumer credit products, primarily through its financial institution operations in Chile, Canada and Mexico. The balance of these receivables was $1,049 million, net of a reserve for doubtful accounts of $63 million at
January 31, 2012, compared to a receivable balance of $673 million, net of a reserve for doubtful accounts of $83 million at January 31, 2011. These balances are included in receivables, net in the Companys Consolidated Balance
Sheets.

Inventories

The Company values inventories at the lower of cost or market as determined primarily by the retail method of accounting, using the last-in, first-out
(LIFO) method for substantially all of the Walmart U.S. segments merchandise inventories. The retail method of accounting results in inventory being valued at the lower of cost or market since permanent markdowns are currently
taken as a reduction of the retail value of inventory. The Sams Club segments merchandise is valued based on the weighted-average cost using the LIFO method. Inventories for the Walmart International operations are primarily valued by
the retail method of accounting and are stated using the first-in, first-out (FIFO) method. At January 31, 2012 and 2011, the Companys inventories valued at LIFO approximate those inventories as if they were valued at FIFO.

Property and Equipment

Property and equipment are stated at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are
capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. The following detail of property and equipment includes estimated useful lives which are generally used to depreciate the assets on a straight-line basis:

As of January 31,

(Amounts in millions)

Estimated Useful Lives

2012

2011

Land

N/A

$

23,499

$

24,386

Buildings and improvements

340 years

84,275

79,051

Fixtures and equipment

325 years

39,234

38,290

Transportation equipment

315 years

2,682

2,595

Construction in progress

N/A

5,312

4,262

Property and equipment

$

155,002

$

148,584

Accumulated depreciation

(45,399

)

(43,486

)

Property and equipment, net

$

109,603

$

105,098

Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the remaining
expected lease term. Depreciation expense, including amortization of property under capital leases, for fiscal 2012, 2011 and 2010 was $8.1 billion, $7.6 billion and $7.2 billion, respectively. Interest costs capitalized on construction projects
were $60 million, $63 million and $85 million in fiscal 2012, 2011 and 2010, respectively.

Long-Lived Assets

Long-lived assets are stated at cost. Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest

27

level of identifiable cash flows, which is at the individual store or club level or, in certain circumstances, a market group of stores. Undiscounted cash flows expected to be generated by the
related assets are estimated over the assets useful lives based on updated projections. If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value
of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique.

Goodwill and Other
Acquired Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business
combinations and is allocated to the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired as determined by a valuation technique commensurate with the intended use of the related asset.
Goodwill and indefinite-lived intangible assets are not amortized; rather, they are evaluated for impairment annually during the Companys fourth fiscal quarter or whenever events or changes in circumstances indicate that the value of the asset
may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-line basis over the periods that expected economic benefits will be provided.

Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill impairment test is
necessary. If the Company determines, based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the quantitative goodwill impairment test would be required. This quantitative
test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches. Based on the results of the qualitative
assessments performed, the Company determined that the fair value of each reporting unit is more likely than not greater than the carrying amount and, as a result, quantitative analyses were not required. The Company has not recorded any impairment
charges related to goodwill.

The following table reflects goodwill activity, by reportable segment, for fiscal 2012 and 2011:

(Amounts in millions)

Walmart U.S.

WalmartInternational

Sams Club

Total

February 1, 2010

$

207

$

15,606

$

313

$

16,126

Currency translation and other



605



605

Acquisitions

32





32

January 31, 2011

239

16,211

313

16,763

Currency translation and other



(535

)



(535

)

Acquisitions

200

4,223



4,423

January 31, 2012

$

439

$

19,899

$

313

$

20,651

In April 2011 and June 2011, the Company completed acquisitions of 147 Netto stores from Dansk Supermarked in the United
Kingdom and a 51% ownership in Massmart, a South African retailer, respectively. In these transactions, the Company acquired approximately $748 million and $3.5 billion in goodwill, respectively. Refer to Note 14 for more information on the
Companys acquisitions.

Indefinite-lived intangible assets are included in other assets and deferred charges in the Companys
Consolidated Balance Sheets. These assets are evaluated for impairment based on their fair values using valuation techniques which are updated annually based on the most recent variables and assumptions. There were no impairment charges related to
indefinite-lived intangible assets recorded during fiscal 2012, 2011 and 2010.

Self-Insurance Reserves

The Company uses a combination of insurance, self-insured retention and self-insurance for a number of risks, including, but not limited to, workers
compensation, general liability, vehicle liability, property and the Companys obligation for employee-related health care benefits. Liabilities relating to these claims associated with these risks are estimated by considering historical claims
experience, including frequency, severity, demographic factors, and other actuarial assumptions, including incurred but not reported claims. In estimating its liability for such claims, the Company periodically analyzes its historical trends,
including loss development, and applies appropriate loss development factors to the incurred costs associated with the claims. The Company also maintains stop-loss insurance coverage for workers compensation and general liability of $5 million
and $15 million, respectively, per occurrence to limit exposure to certain risks. See Note 6 for more information.

28

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets
to the amounts more likely than not to be realized.

The Company records a liability for unrecognized tax benefits resulting from uncertain
tax positions taken or expected to be taken in a tax return. The Company records interest and penalties related to unrecognized tax benefits in interest expense and operating, selling, general and administrative expenses, respectively, in the
Companys Consolidated Statements of Income.

Revenue Recognition

Sales

The Company recognizes sales
revenue net of sales taxes and estimated sales returns at the time it sells merchandise to the customer.

Shopping Cards

Customer purchases of shopping cards are not recognized as revenue until the card is redeemed and the customer purchases merchandise using the shopping
card. Shopping cards in the U.S. do not carry an expiration date and, therefore, customers and members can redeem their shopping cards for merchandise indefinitely. Shopping cards in certain foreign countries where the Company does business may have
expiration dates. A certain amount of shopping cards, both with and without expiration dates, will not be redeemed. The Company estimates unredeemed shopping cards and recognizes revenue for these amounts over shopping card historical usage periods
based on historical redemption rates. The Company periodically reviews and updates its estimates of usage periods and redemption rates.

Financial and Other Services

The
Company recognizes revenue from financial and other service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in the Companys Consolidated Statements of Income.

Membership Fee

The Company
recognizes membership fee revenue both in the United States and internationally over the term of the membership, which is 12 months. The following table summarizes membership fee activity for fiscal 2012, 2011 and 2010.

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Deferred membership fee revenue, beginning of year

$

542

$

532

$

541

Cash received from members

1,111

1,074

1,048

Membership fee revenue recognized

(1,094

)

(1,064

)

(1,057

)

Deferred membership fee revenue, end of year

$

559

$

542

$

532

Membership fee revenue is included in membership and other income in the Companys Consolidated Statements of
Income. The deferred membership fee is included in accrued liabilities in the Companys Consolidated Balance Sheets.

Cost of Sales

Cost of sales includes actual product cost, the cost of transportation to the Companys warehouses, stores and clubs from
suppliers, the cost of transportation from the Companys warehouses to the stores, clubs and customers and the cost of warehousing for its Sams Club segment and import distribution centers.

Payments from Suppliers

Walmart
receives consideration from suppliers for various programs, primarily volume incentives, warehouse allowances and reimbursements for specific programs such as markdowns, margin protection, advertising and supplier-specific fixtures. Substantially
all payments from suppliers are accounted for as a reduction of cost of sales and are recognized in the Companys Consolidated Statements of Income when the related inventory is sold.

29

Operating, Selling, General and Administrative Expenses

Operating, selling, general and administrative expenses include all operating costs of the Company, except cost of sales, as described above. As a result,
the majority of the cost of warehousing and occupancy for the Walmart U.S. and Walmart International segments distribution facilities is included in operating, selling, general and administrative expenses. Because the Company does not include
most of the cost of its Walmart U.S. and Walmart International segments distribution facilities in cost of sales, its gross profit and gross profit as a percentage of net sales (gross profit margin) may not be comparable to those
of other retailers that may include all costs related to their distribution facilities in cost of sales and in the calculation of gross profit.

Advertising Costs

Advertising
costs are expensed as incurred and were $2.3 billion, $2.5 billion and $2.4 billion in fiscal 2012, 2011 and 2010, respectively. Advertising costs consist primarily of print, television and digital advertisements and are recorded in operating,
selling, general and administrative expenses in the Companys Consolidated Statements of Income. Advertising reimbursements received from suppliers are generally accounted for as a reduction of cost of sales and recognized in the Companys
Consolidated Statements of Income when the related inventory is sold. When advertising reimbursements are directly related to specific advertising activities and meet the criteria in ASC Topic 605, they are recognized as a reduction of advertising
expenses in operating, selling, general and administrative expenses.

Leases

The Company estimates the expected term of a lease by assuming the exercise of renewal options where an economic penalty exists that would preclude the
abandonment of the lease at the end of the initial non-cancelable term and the exercise of such renewal is at the sole discretion of the Company. The expected term is used in the determination of whether a store or club lease is a capital or
operating lease and in the calculation of straight-line rent expense. Additionally, the useful life of leasehold improvements is limited by the expected lease term or the economic life of the asset, whichever is shorter. If significant expenditures
are made for leasehold improvements late in the expected term of a lease and renewal is reasonably assured, the useful life of the leasehold improvement is limited to the end of the renewal period or economic life of the asset, whichever is shorter.

Rent abatements and escalations are considered in the calculation of minimum lease payments in the Companys capital lease tests and in
determining straight-line rent expense for operating leases.

Pre-Opening Costs

The costs of start-up activities, including organization costs, related to new store openings, store remodels, expansions and relocations are expensed as
incurred and included in operating, selling, general and administrative expenses in the Companys Consolidated Statements of Income. Pre-opening costs totaled $308 million, $320 million and $227 million for the fiscal years ended
January 31, 2012, 2011 and 2010, respectively.

Currency Translation

The assets and liabilities of all international subsidiaries are translated from the respective local currency to the U.S. dollar using exchange rates at
the balance sheet date. Related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). The income statements of international subsidiaries are translated from the respective local currencies to the U.S.
dollar using average exchange rates for the period covered by the income statements.

Reclassifications

Certain reclassifications have been made to prior fiscal year amounts or balances to conform to the presentation in the current fiscal year. These
reclassifications did not impact consolidated operating income or net income. Additionally, certain segment asset and expense allocations have been reclassified among segments in the current period. See Note 15 for further detail.

Recent Accounting Pronouncements

In 2011, the Financial Accounting Standards Board (FASB) issued two Accounting Standards Updates (ASU) which amend guidance for
the presentation of comprehensive income. The amended guidance requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or

30

in two separate, but consecutive statements. The current option to report other comprehensive income and its components in the statement of shareholders equity will be eliminated. Although
the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under existing guidance. These ASUs are effective for the Company in the first
quarter of fiscal 2013 and retrospective application will be required. These ASUs will change the Companys financial statement presentation of comprehensive income but will not impact the Companys net income, financial position or cash
flows.

In 2011, the FASB issued an ASU, which is intended to reduce complexity and costs by allowing an entity the option to make a
qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The ASU also expands upon the examples of events and circumstances that an entity should consider between
annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The ASU is effective for the Company in the first quarter of fiscal 2013, with early adoption
permitted. The Company early adopted the provisions of the ASU in fiscal 2012 for its fiscal 2012 goodwill impairment test.

Note 2. Net Income Per Common Share

Basic income per common share from continuing operations attributable to Walmart is based on the weighted-average common shares
outstanding. Diluted income per common share from continuing operations attributable to Walmart is based on the weighted-average number of outstanding common shares adjusted for the dilutive effect of stock options and other share-based awards. The
Company had approximately 1 million, 4 million and 5 million stock options outstanding at January 31, 2012, 2011 and 2010, respectively, which were not included in the diluted income per common share from continuing operations
attributable to Walmart calculation because their effect would be antidilutive.

The following table provides a reconciliation of the
numerators and denominators used to determine basic and diluted income per common share from continuing operations attributable to Walmart:

Fiscal Years Ended January 31,

(Amounts in millions, except per share data)

2012

2011

2010

Numerator

Income from continuing operations

$

16,454

$

15,959

$

14,962

Less consolidated net income attributable to noncontrolling interest

(688

)

(604

)

(513

)

Income from continuing operations attributable to Walmart

$

15,766

$

15,355

$

14,449

Denominator

Weighted-average common shares outstanding, basic

3,460

3,656

3,866

Dilutive impact of stock options and other share-based awards

14

14

11

Weighted-average common shares outstanding, diluted

3,474

3,670

3,877

Net income per common share from continuing operations attributable to Walmart

Basic

$

4.56

$

4.20

$

3.74

Diluted

4.54

4.18

3.73

Note 3. Shareholders Equity

Share-Based Compensation

The Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all plans was $355 million, $371 million and $335 million
for fiscal 2012, 2011 and 2010, respectively. Share-based compensation expense is included in operating, selling, general and administrative expenses in the Companys Consolidated Statements of Income. The total income tax benefit recognized
for share-based compensation was $134 million, $141 million and $126 million for fiscal 2012, 2011 and 2010, respectively. The following table summarizes the Companys share-based compensation expense by award type:

31

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Restricted stock and performance share awards

$

142

$

162

$

140

Restricted stock rights

184

157

111

Stock options

29

52

84

Share-based compensation expense

$

355

$

371

$

335

The Companys shareholder-approved Stock Incentive Plan of 2010 (the Plan) became effective June 4,
2010 and amended and restated the Companys Stock Incentive Plan of 2005. The Plan was established to grant stock options, restricted (non-vested) stock, performance shares and other equity compensation awards for which 210 million shares
of common stock issued or to be issued under the Plan have been registered under the Securities Act of 1933, as amended. The Company believes that such awards serve to align the interests of its associates with those of its shareholders.

The Plans award types are summarized as follows:



Restricted stock grants are awards for shares that vest based on the passage of time, achievement of performance criteria, or both. Performance share
awards vest based on the passage of time and achievement of performance criteria and may range from 0% to 150% of the original award amount. Vesting periods for both awards are generally between three and five years. Awards granted before
January 1, 2008 may be settled in stock or deferred as stock or cash, based upon the recipients election. Consequently, these awards are included in accrued liabilities and deferred income taxes and other in the Companys
Consolidated Balance Sheets, unless the recipient elected for the award to be settled or deferred in stock. The fair value of the restricted stock and performance share liabilities is remeasured each reporting period and the total liability for
these awards at January 31, 2012 and 2011 was $16 million and $12 million, respectively. Restricted stock awards and performance share awards issued in fiscal 2009 and thereafter, may be settled or deferred in stock and are accounted for as
equity in the Companys Consolidated Balance Sheets. The fair value of these awards is determined on the date of grant using the Companys stock price discounted for the expected dividend yield through the vesting period and is recognized
ratably over the vesting period.



Restricted stock rights provide rights to Company stock after a specified service period. For restricted stock rights issued in fiscal 2009 and
thereafter, 50% vest three years from the grant date and the remaining 50% vesting five years from the grant date. The fair value of each restricted stock right is determined on the date of grant using the stock price discounted for the expected
dividend yield through the vesting period and is recognized ratably over the vesting period. The expected dividend yield is based on the anticipated dividends over the vesting period. The weighted-average discount for the dividend yield used to
determine the fair value of restricted stock rights granted in fiscal 2012, 2011 and 2010 was 11.7%, 9.1% and 8.5%, respectively.



Stock options allow the associate to buy a specified number of shares at a set price. Options granted generally vest over five years and have a
contractual term of ten years. Options may include restrictions related to employment, satisfaction of performance conditions or other conditions. Under the Plan and prior plans, substantially all stock options have been granted with an exercise
price equal to the market price of the Companys stock at the date of grant.

In addition to the Plan, the
Companys subsidiary in the United Kingdom, ASDA, has two other stock option plans for certain ASDA colleagues. A combined 49 million shares of the Companys common stock were registered under the Securities Act of 1933, as amended,
for issuance upon the exercise of stock options granted under the Colleague Share Ownership Plan 1999 (the CSOP) and the ASDA Sharesave Plan 2000 (Sharesave Plan).



The CSOP grants have either a three- or six-year vesting period. The CSOP options may be exercised during the two months immediately following the
vesting date.



The Sharesave Plan grants options at 80% of the Companys average stock price for the three days preceding the grant date. The Sharesave Plan
options vest after three years and may generally be exercised up to six months after the vesting date.

32

The following table shows the activity for each award type during fiscal 2012:

As of January 31, 2012, the unrecognized compensation cost for restricted stock and performance share awards, restricted stock rights and stock option awards was $356 million, $427 million, and $23
million, respectively, and is expected to be recognized over a weighted-average period of 2.3 years, 2.0 years and 1.0 years, respectively. Additionally, as of January 31, 2012, the weighted-average remaining life for stock options outstanding
and stock options exercisable was 4.3 years and 2.9 years, respectively, and the stock options had an aggregate intrinsic value of $265 million and $148 million, respectively.

The following table includes additional information related to the restricted stock and performance share awards and the restricted stock rights:

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Fair value of restricted stock and performance share awards vested

$

134

$

142

$

110

Fair value of restricted stock rights vested

178

50

49

The following table includes additional information related to stock option awards:

Fiscal Years Ended January 31,

(Amounts in millions)

2012

2011

2010

Fair value of stock options vested

$

50

$

54

$

79

Proceeds from stock options exercised

420

205

111

Intrinsic value of stock options exercised

91

51

39

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes-Merton option
valuation model that uses various assumptions for inputs. The Company uses expected volatilities and risk-free interest rates that correlate with the expected term of the option when estimating an options fair value. The following table
provides the weighted-average assumptions used to estimate the fair values of the Companys stock options granted in fiscal 2012, 2011 and 2010:

Fiscal Years Ended January 31,

2012

2011

2010

Dividend yield (1)

2.9

%

2.3

%

2.1

%

Volatility (2)

17.6

%

17.1

%

18.7

%

Risk-free interest rate (3)

1.3

%

1.8

%

1.4

%

Expected life in years (4)

3.0

3.1

3.1

Weighted-average fair value of options granted

$

9.61

$

12.53

$

10.41

(1)

Expected dividend yield is based on the anticipated dividends over the vesting period.

(2)

Expected volatility is based on historical volatility of the Companys stock.

(3)

Risk-free interest rate is based on the U.S. Treasury yield curve at the time of the grant.

(4)

Expected life in years is based on historical exercise and expiration activity of grants with similar vesting periods.

33

Share Repurchase Program

From time to time, the Company has repurchased shares of its common stock under share repurchase programs authorized by the Board of Directors. The current share repurchase program has no expiration date
or other restriction limiting the period over which the Company can make share repurchases. At January 31, 2012, authorization for $11.3 billion of additional share repurchases remained under the current share repurchase program. Any
repurchased shares are constructively retired and returned to an unissued status.

The Company considers several factors in determining when
to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings and the market price of its common stock. Cash paid for share repurchases during fiscal 2012, 2011 and 2010 was as follows:

Share
Repurchases

Total Number ofShares Repurchased(in millions)

Average PricePaid per Share

TotalInvestment(in
billions)

Fiscal year ended January 31, 2012

115.3

$

54.64

$

6.3

Fiscal year ended January 31, 2011

279.1

53.03

14.8

Fiscal year ended January 31, 2010

145.5

50.17

7.3

Note 4. Accumulated Other Comprehensive Income (Loss)

The following table provides the changes in the composition of accumulated other comprehensive income (loss) for fiscal 2012, 2011 and
2010:

(Amounts in millions)

Currency Translationand
Other

DerivativeInstruments

Minimum
PensionLiability

Total

Balances at February 1, 2009

$

(2,396

)

$

(17

)

$

(275

)

$

(2,688

)

Currency translation

2,744





2,744

Net change in fair value of derivatives



94



94

Minimum pension liability





(220

)

(220

)

Balances at January 31, 2010

348

77

(495

)

(70

)

Currency translation

878





878

Net change in fair value of derivatives



(17

)



(17

)

Minimum pension liability





(145

)

(145

)

Balances at January 31, 2011

1,226

60

$

(640

)

646

Currency translation

(2,032

)





(2,032

)

Net change in fair value of derivatives



(67

)



(67

)

Minimum pension liability





43

43

Balances at January 31, 2012

$

(806

)

$

(7

)

$

(597

)

$

(1,410

)

Amounts included in accumulated other comprehensive income (loss) are recorded net of their related income tax effects.
The Companys unrealized net gains and losses on net investment hedges, included in the currency translation and other account of accumulated other comprehensive income (loss), were not significant as of January 31, 2012 and 2011. The Company
reclassified $(86) million and $(14) million, respectively, in fiscal 2012 and 2011 from accumulated other comprehensive income (loss) to earnings to offset the impact of currency translation on the re-measurement of non-U.S. denominated debt.

Note 5. Restructuring Charges

In fiscal 2010, the Company announced several organizational changes, including the closure of 10 Sams Clubs, designed to
strengthen and streamline its operations. As a result, the Company recorded $260 million in pre-tax restructuring charges in fiscal 2010 as follows:

34

Fiscal Year Ended January 31, 2010

(Amounts in millions)

AssetImpairment

SeveranceCosts

Total

Walmart U.S.

$



$

73

$

73

Sams Club

133

41

174

Other



13

13

Total

$

133

$

127

$

260

The asset impairment charges generally relate to the real estate of the Sams Club closures, which was written down
to their estimated fair value of $46 million. The fair value was determined based on comparable market values of similar properties or on a rental income approach, using Level 2 inputs of the three-tier fair value hierarchy discussed in Note 8.

The pre-tax restructuring charges of $260 million are classified in operating, selling, general and administrative expenses in the
Companys Consolidated Statement of Income for fiscal 2010. At January 31, 2010, the Company had $127 million of severance costs included in accrued liabilities in the Companys Consolidated Balance Sheet. These severance costs were
paid during fiscal 2011.

Self-insurance consists of all insurance-related liabilities, such as workers compensation, general liability, vehicle liability, property and
employee-related health care benefits.

(3)

Other accrued liabilities consist of various items such as accrued taxes, maintenance, utilities, advertising and interest.

Note 7. Short-term Borrowings and Long-term Debt

Information on the Companys short-term borrowings and interest rates is as follows:

Fiscal Years Ended January 31,

(Dollar amounts in millions)

2012

2011

2010

Maximum amount outstanding at any month-end

$

9,594

$

9,282

$

4,536

Average daily short-term borrowings

6,040

4,020

1,596

Weighted-average interest rate

0.1

%

0.2

%

0.5

%

Short-term borrowings consist of commercial paper and lines of credit. Short-term borrowings outstanding at
January 31, 2012 and 2011 were $4.0 billion and $1.0 billion, respectively.

The Company has certain lines of credit totaling $18.5
billion, most of which were undrawn, as of January 31, 2012 and is committed with 26 financial institutions. In conjunction with these lines of credit, the Company has agreed to observe certain covenants, the most restrictive of which relates
to maximum amounts of secured debt and long-term leases. Committed lines of credit are primarily used to support commercial paper and remained undrawn as of January 31, 2012. The committed lines of credit mature at various times between June
2012 and June 2016, carry interest rates generally ranging between LIBOR plus 10 basis points and LIBOR plus 75 basis points, and incur commitment fees ranging between 1.5 and 10.0 basis points.

In June 2011, the Company renewed and extended its existing 364-day revolving credit facility (the 364-day Facility) and its five-year credit
facility (the 5-year Facility), both of which are used to support its commercial paper program. The size of the 364-day Facility was increased from $9.0 billion to $10.0 billion, while the 5-year Facility was increased from $4.3 billion
to $6.3 billion. Fiscal 2012 undrawn and drawn fees remained relatively flat from fiscal 2011. The 364-day Facility and the 5-year Facility remained undrawn as of January 31, 2012.

35

The Company had trade letters of credit outstanding totaling $2.9 billion and $2.6 billion at
January 31, 2012 and 2011, respectively. At January 31, 2012 and 2011, the Company had stand-by letters of credit outstanding totaling $2.2 billion and $2.0 billion, respectively. The Company renewed the stand-by letter of credit
facilities in June 2011, which is used to support various potential and actual obligations.

The Companys long-term debt consists of the
following:

January 31, 2012

January 31, 2011

(In millions of U.S. dollars)

Maturity DatesBy Fiscal Year

Amount

AverageRate (1)

Amount

AverageRate (1)

Unsecured Debt

Fixed

2013-2042

$

32,945

4.6

%

$

29,945

4.7

%

Variable

2013

500

5.2

%

500

5.0

%

Total Denominated U.S. Dollar

33,445

30,445

Fixed

2030

1,308

4.9

%

1,369

4.9

%

Variable









Total Denominated Euro

1,308

1,369

Fixed

2013-2039

6,301

5.3

%

6,402

5.2

%

Variable









Total Denominated Sterling

6,301

6,402

Fixed

2014-2021

2,335

1.4

%

3,085

1.5

%

Variable

2014-2016

1,271

0.8

%

2,242

1.1

%

Total Denominated Yen

3,606

5,327

Total Unsecured Debt

44,660

43,543

Total Other Debt (in USD)(2)

2013-2030

1,202

1,537

Total Debt

45,862

45,080

Less amounts due within one year

(1,975

)

(4,655

)

Derivative fair value adjustments

183

267

Long-term Debt

$

44,070

$

40,692

(1)

The average rate
represents the weighted-average stated rate for each corresponding debt category, based on year-end balances and year-end local currency interest rates. Interest costs are also impacted by certain derivative financial instruments described in Note
9.

(2)

A portion of other
debt includes secured debt in the amount of $319 million, which is collateralized by property with an aggregate carrying amount of approximately $866 million.

The Company has $500 million in debt with embedded put options. The issuance of money market puttable reset securities in the amount of $500 million is structured to be remarketed in connection with the
annual reset of the interest rate. If, for any reason, the remarketing of the notes does not occur at the time of any interest rate reset, the holders of the notes must sell, and the Company must repurchase, the notes at par. This issuance has been
classified as long-term debt due within one year in the Companys Consolidated Balance Sheets. Annual maturities of long-term debt during the next five years and thereafter are as follows:

36

(Amounts in millions)

Annual

Fiscal Year

Maturity

2013

$

1,975

2014

5,168

2015

3,927

2016

4,750

2017

1,130

Thereafter

28,912

Total

$

45,862

Debt Issuances

Information on significant long-term debt issued during fiscal 2012 is as follows (amounts in millions):

Issue Date

Maturity Date

Interest Rate

PrincipalAmount

April 18, 2011

April 15, 2014

1.625

%

$

1,000

April 18, 2011

April 15, 2016

2.800

%

1,000

April 18, 2011

April 15, 2021

4.250

%

1,000

April 18, 2011

April 15, 2041

5.625

%

2,000

Total

$

5,000

The aggregate net proceeds from these note issuances were approximately $4.9 billion. The notes of each series require
semi-annual interest payments on April 15 and October 15 of each year, with the first interest payment having commenced on October 15, 2011. Unless previously purchased and canceled, the Company will repay the notes of each series at
100% of the principal amount, together with accrued and unpaid interest thereon, at maturity. The notes of each series are senior, unsecured obligations of the Company.

Note 8. Fair Value Measurements

The Company records and discloses certain financial and non-financial assets and liabilities at their fair value. The fair value of an
asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liabilitys fair value is defined as the amount that would be paid to
transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor.

Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:



Level 1 - observable inputs such as quoted prices in active markets;



Level 2 - inputs other than quoted prices in active markets that are either directly or indirectly observable; and



Level 3 - unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions.

The disclosure of fair value of certain financial assets and liabilities recorded at cost is as follows:

Cash and cash equivalents: The carrying value approximates fair value due to the short maturity of these instruments.

Short-term debt: The carrying value approximates fair value due to the short maturity of these instruments.

Long-term debt: The fair value is based on the Companys current incremental borrowing rate for similar types of borrowing
arrangements or, where applicable, quoted market prices. The carrying value and fair value of the Companys debt as of January 31, 2012 and 2011 is as follows:

January 31, 2012

January 31, 2011

(Amounts in millions)

Carrying Value

Fair Value

Carrying Value

Fair Value

Long-term debt, including amounts due within one year

$

46,045

$

53,043

$

45,347

$

47,012

Additionally, as of January 31, 2012 and 2011, the Company held certain derivative asset and liability positions
that are required to be measured at fair value on a recurring basis. The majority of the Companys derivative instruments relate to

37

interest rate swaps. The fair values of these interest rate swaps have been measured in accordance with Level 2 inputs of the fair value hierarchy, using the income approach. These inputs include
the relevant interest rate and foreign currency forward curves. As of January 31, 2012 and 2011, the notional amounts and fair values of these interest rate swaps are as follows (asset/(liability)):

The fair values above are the estimated amounts the Company would receive or pay upon a termination of the agreements
relating to such instruments as of the reporting dates.

Note 9. Derivative Financial Instruments

The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest
and currency exchange rates, as well as to maintain an appropriate mix of fixed- and floating-rate debt. Use of derivative financial instruments in hedging programs subjects the Company to certain risks, such as market and credit risks. Market risk
represents the possibility that the value of the derivative instrument will change. In a hedging relationship, the change in the value of the derivative is offset to a great extent by the change in the value of the underlying hedged item. Credit
risk related to derivatives represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual amount of the Companys derivative financial instruments, is used to measure interest to be
paid or received and does not represent the Companys exposure due to credit risk. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring
collateral (generally cash) from the counterparty when appropriate. The Companys transactions are with counterparties rated A- or better by nationally recognized credit rating agencies. In connection with various derivative
agreements with counterparties, the Company held cash collateral from these counterparties of $387 million and $344 million at January 31, 2012 and 2011, respectively. The Companys policy is to record cash collateral exclusive of any
derivative asset, and any collateral holdings are reflected in the Companys accrued liabilities as amounts due to the counterparties. Furthermore, as part of the master netting arrangements with these counterparties, the Company is also
required to post collateral if the derivative liability position exceeds $150 million. The Company has no outstanding collateral postings; and in the event of providing cash collateral, the Company would record the posting as a receivable exclusive
of any derivative liability.

When the Company uses derivative financial instruments for the purpose of hedging its exposure to interest and
currency exchange rates, the contract terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation
criteria are recorded using hedge accounting. If a derivative instrument is a hedge, depending on the nature of the hedge, changes in the fair value of the instrument are either offset against the change in fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an instruments change in fair value is immediately
recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in
earnings during the period of change.

Fair Value Instruments

The Company is party to receive fixed-rate, pay floating-rate interest rate swaps to hedge the fair value of fixed-rate debt. The notional amounts are used to measure interest to be paid or received and
do not represent the exposure due to credit loss. The Companys interest rate swaps that receive fixed-interest rate payments and pay floating-interest rate payments are designated as fair value hedges. As the specific terms and notional
amounts of the derivative instruments match those of the instruments being hedged, the derivative instruments were assumed to be perfectly effective hedges and all changes in fair value of the hedges were recorded in long-term debt and accumulated
other comprehensive income (loss) in the Companys Consolidated Balance Sheets with no net impact in the Companys Consolidated Statements of Income. These fair value instruments will mature on various dates ranging from April 2012 to May
2014.

38

Net Investment Instruments

The Company is party to cross-currency interest rate swaps that hedge its net investments, as well as its currency exchange rate fluctuation exposure associated with the forecasted payments of principal
and interest of non-U.S. denominated debt. The agreements are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. All changes in the fair value of these instruments are recorded in accumulated other
comprehensive income (loss), offsetting the currency translation adjustment that is also recorded in accumulated other comprehensive income (loss). These instruments will mature on dates ranging from October 2023 to February 2030.

The Company has outstanding debt of approximately £3.0 billion as of January 31, 2012 and 2011 that is designated as a hedge of the
Companys net investment in the United Kingdom. The Company also has outstanding debt of approximately ¥275.0 billion and ¥437.0 billion as of January 31, 2012 and 2011, respectively, that is designated as a hedge of the
Companys net investment in Japan. Any translation of non-U.S.-denominated debt is recorded in accumulated other comprehensive income (loss), offsetting the currency translation adjustment that is also recorded in accumulated other
comprehensive income (loss). These instruments will mature on dates ranging from January 2013 to January 2039.

Cash Flow Instruments

The Company is party to receive floating-rate, pay fixed-rate interest rate swaps to hedge the interest rate risk of certain
non-U.S.-denominated debt. The swaps are designated as cash flow hedges of interest rate risk. Amounts reported in accumulated other comprehensive income (loss) related to derivatives are reclassified from accumulated other comprehensive income
(loss) to earnings as interest payments are made on the Companys variable-rate debt, converting the floating-rate interest expense into fixed-rate interest expense. These cash flow instruments will mature on dates ranging from August 2013 to
July 2015.

The Company is also party to receive fixed-rate, pay fixed-rate cross-currency interest rate swaps to hedge the currency exposure
associated with the forecasted payments of principal and interest of non-U.S.-denominated debt. The swaps are designated as cash flow hedges of the currency risk related to payments on the non-U.S.-denominated debt. The effective portion of changes
in the fair value of derivatives designated as cash flow hedges of foreign exchange risk is recorded in other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects
earnings. The hedged items are recognized foreign-currency denominated liabilities that are remeasured at spot exchange rates each period, and the assessment of effectiveness (and measurement of any ineffectiveness) is based on total changes in the
derivatives cash flows. As a result, the amount reclassified into earnings each period includes an amount that offsets the related transaction gain or loss arising from that remeasurement and the adjustment to earnings for the periods
allocable portion of the initial spot-forward difference associated with the hedging instrument. These cash flow instruments will mature on dates ranging from September 2029 to March 2034. Any ineffectiveness with these instruments has been and is
expected to be immaterial.

Financial Statement Presentation

Hedging instruments with an unrealized gain are recorded in the Companys Consolidated Balance Sheets as either a current or a non-current asset, based on maturity date, and those hedging instruments
with an unrealized loss are recorded as either a current or a non-current liability, based on maturity date.

As of January 31, 2012 and
2011, the Companys financial instruments were classified as follows in its Consolidated Balance Sheets:

January 31, 2012

January 31, 2011

(Amounts in millions)

Fair
ValueInstruments

Net
InvestmentHedge

Cash FlowInstruments

Fair
ValueInstruments

Net
InvestmentHedge

Cash FlowInstruments

Balance Sheet Classification:

Prepaid expenses and other

$

2

$



$



$



$



$



Other assets and deferred charges

181

316

91

267

233

238

Assets subtotals

$

183

$

316

$

91

$

267

$

233

$

238

Long-term debt due within one year

$

2

$



$



$



$



$



Long-term debt

181





267





Deferred income taxes and other





110





18

Liability subtotals

$

183

$



$

110

$

267

$



$

18

39

Note 10. Taxes

Income from Continuing Operations

The components of income from continuing operations before income taxes are as follows:

$00,000

$00,000

$00,000

(Amounts in millions)

Fiscal Years Ended January 31,

2012

2011

2010

U.S.

$

18,685

$

18,398

$

17,705

Non-U.S.

5,713

5,140

4,413

Total income from continuing operations before income taxes

$

24,398

$

23,538

$

22,118

A summary of the provision for income taxes is as follows:

$00,000

$00,000

$00,000

(Amounts in millions)

Fiscal Years Ended January 31,

2012

2011

2010

Current:

U.S. federal

$

4,596

$

4,600

$

5,798

U.S. state and local

743

637

599

International

1,403

1,466

1,246

Total current tax provision

6,742

6,703

7,643

Deferred:

U.S. federal

1,444

818

(432

)

U.S. state and local

57

39

78

International

(299

)

19

(133

)

Total deferred tax provision

1,202

876

(487

)

Total provision for income taxes

$

7,944

$

7,579

$

7,156

Effective Tax Rate Reconciliation

The Companys effective income tax rate is typically lower than the U.S. statutory rate primarily because of benefits from lower-taxed global operations, including the use of global funding
structures and certain U.S. tax credits. The Companys non-U.S. income is subject to local country tax rates that are below the 35% U.S. statutory rate. Certain non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not
subject to current U.S. income tax. A reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pretax income from continuing operations is as follows:

$00,000

$00,000

$00,000

Fiscal Years Ended January 31,

2012

2011

2010

U.S. statutory tax rate

35.0

%

35.0

%

35.0

%

U.S. state income taxes, net of federal income tax benefit

2.0

%

1.9

%

2.0

%

Income taxed outside the U.S.

-2.8

%

-2.2

%

-1.6

%

Net impact of repatriated international earnings

-0.3

%

-1.5

%

-3.4

%

Other, net

-1.3

%

-1.0

%

0.4

%

Effective income tax rate

32.6

%

32.2

%

32.4

%

40

Deferred Taxes

The significant components of the Companys deferred tax account balances are as follows:

$00,000

$00,000

(Amounts in millions)

January 31,

2012

2011

Deferred tax assets:

Loss and tax credit carryforwards

$

2,996

$

2,968

Accrued liabilities

2,949

3,532

Share-based compensation

376

332

Other

1,029

708

Total deferred tax assets

7,350

7,540

Valuation allowance

(2,528

)

(2,899

)

Deferred tax assets, net of valuation allowance

$

4,822

$

4,641

Deferred tax liabilities:

Property and equipment

$

5,891

$

4,848

Inventories

1,627

1,014

Other

409

474

Total deferred tax liabilities

7,927

6,336

Net deferred tax liabilities

$

3,105

$

1,695

The deferred taxes noted above are classified as follows in the Companys Consolidated Balance
Sheets: